ORAL ANSWERS TO QUESTIONS

SCOTLAND

The Secretary of State was asked—

Barnett Formula

Peter Bone: What recent discussions he has had with the Chancellor of the Exchequer on potential changes to the Barnett formula.

Jim Murphy: I have regular discussions concerning a range of topics with my right hon. Friend the Chancellor of the Exchequer.

Peter Bone: I am not entirely sure that that answers my question. My constituents pay the same taxes as the people of Scotland, yet receive £2,243 a year less public expenditure. Why should every man, woman and child in my constituency pay an extra £2,200 to subsidise the Scottish Government?

Jim Murphy: That is not the case at all. The four nations of the United Kingdom are, of course, stronger together. We gain great strength from the cohesiveness of that unique union of the United Kingdom. I think the hon. Gentleman would do well to reflect on the fact that there is higher spending on policing in England, that the rate of growth in health spending is 7 per cent. in England while in Scotland it is 4 per cent. and that Sure Start is available in England and not in Scotland, and so much else besides. Of course, it is an issue for the Scottish Government and the Scottish Parliament how they allocate the specific funding available to them.

Adam Ingram: One of the areas to benefit under the Barnett formula is education, yet colleges of education, including those run by South Lanarkshire council in my constituency, are turning away thousands of potential trainees. Following his meeting with the Chancellor of the Exchequer, and if he has plans to meet the First Minister, will the Secretary of State raise the importance of further education and ensure that those people who are demanding training and retraining are not denied it under the Administration in Edinburgh?

Jim Murphy: My right hon. Friend is absolutely correct. I plan to meet the First Minister, the CBI and the Scottish Trades Union Congress in Scotland next month to discuss those and other issues. Further education colleges in Scotland support about half a million Scots every year, including in Lanarkshire. It is essential that those who are unemployed in Scotland, those who need retraining and those who need apprenticeships can gain from those apprenticeships, and that the necessary Government investment is put in place. At the moment, the proposals brought forward by the Scottish SNP Government do not meet that ambition.

Stewart Hosie: It is clear from the Conservative question that the Conservatives want to continue to cut the Scottish budget. Of course, the UK Labour Government's position is also to cut £1 billion from the Scottish budget. Does the Secretary of State agree with Rhodri Morgan, the leader of the Labour party in Wales, that now is the wrong time to be cutting public expenditure? Will he stand up to the Treasury, demand that the £1 billion cut be frozen or reversed and that Scotland have the opportunity—

Mr. Speaker: Order. This is not an opportunity to make a speech. The hon. Gentleman is asking a supplementary question.

Jim Murphy: I was in Dundee recently and met business representatives and trade unions. They welcomed the proposals being made by the UK Government. The hon. Gentleman invites me to agree with the comments of a fellow politician; I invite him to agree with the comments of Mr. Swinney, who is from his party. He said:
	"we welcome a number of elements of the direction that the UK Government has taken to get the economy moving."—[ Scottish Parliament Official Report, 26 November 2008; c. 12722-23.]
	The Scottish Government now have more than double the budget that Donald Dewar had about a decade ago. They should put it to good use and invest in Scotland to get us through this economic storm. I am determined to do what I can and will work with anyone in the interests of Scotland to ensure that that happens.

Ian Davidson: How can a nationalist-Tory alliance complain about a lack of money in Scotland if they can find £12.5 million to buy a single painting for Edinburgh at a time when galleries in Glasgow have rain coming through the roof and when spending on arts and culture in Glasgow is being cut? Does that not show gross incompetence?

Jim Murphy: My criticism of the SNP Government is not that they have invested in a single painting, but that they are not investing in thousands of Scots or in Scottish apprenticeships so that young Scots, in particular, have the chance to get the skills and confidence to compete in the labour market. We are joined in that criticism by the Scottish trade unions.

Several hon. Members: rose —

Mr. Speaker: Order. May I remind the House that the criticism of the Scottish Government refers to a devolved Parliament? The Scottish Parliament is a creation of this House—we devolved the power—and prolonged criticism of the Scottish Parliament will give the impression that that is all we have to talk about.

Alistair Carmichael: Does the Secretary of State— [ Interruption. ]

Mr. Speaker: Order. Mr. Robertson, I expect better. Your behaviour is terrible, absolutely terrible. You are a bad example.

Alistair Carmichael: I join you in that expectation, Mr. Speaker, but fear that we may be disappointed.
	Does the Secretary of State agree that, for those of us who believe in the continuation of the United Kingdom, reform of the Barnett formula is necessary as part of a process that gives the Scottish Parliament more control over how it raises its budget, as well as how it spends it? In that regard, does he agree that the work of the Calman commission is crucial? It has been reported this morning that the Scottish Government are to start engaging with Calman. If so, does he agree that that will be welcome news indeed?

Jim Murphy: The Calman commission looking at the future of devolution in Scotland is undoubtedly an important piece of work. Ken Calman also initiated the work of the Muscatelli report on the future funding of devolution in Scotland. I shall not pre-empt the outcome of the Calman report today, but I agree with the hon. Gentleman that it is an essential and important piece of work and we look forward to co-operating on it very closely.

Home Repossessions

Mohammad Sarwar: What steps to minimise home repossession he discussed with Scottish representatives of the Council of Mortgage Lenders at their meeting on 30 October 2008.

Ann McKechin: My right hon. Friend discussed a number of issues, including seeking reassurance that the new industry guidance on mortgage arrears and possessions applied throughout the UK.

Mohammad Sarwar: I thank the Minister for her reply. The credit crunch continues to affect the lives of many people, in Scotland and all over the world. My constituents welcome the decisions that the British Government have taken to help home owners in Scotland, but unfortunately the Scottish Administration have not given the same guarantees— [ Interruption. ] I understand, but the problem affects thousands of my constituents in Glasgow. Will the Minister reassure me that she will do everything in her power to ensure that as few people as possible face the nightmare of home repossession?

Ann McKechin: My hon. Friend raises a very important matter. The UK Government are deeply concerned that as few people as possible should face the threat of repossession, and that is exactly why we have strengthened the level of income support for mortgage interest payments. That support is now available after 13 weeks rather than 39, and will cover mortgages of up to £200,000. In addition, we are working very closely with all major lenders on the new home owners mortgage support scheme, which will apply to people who may face redundancy or a drastic loss of income on a temporary basis and allow them to defer their mortgage payments for up to two years.
	As my hon. Friend knows, it is also important that the court protocols are in place to make sure that people unfortunate enough to face repossession get protection and good advice when they enter the court process. I am pleased to note that, following representations in the later part of last year, the Scottish Government have agreed to set up a repossessions advice group to see how the law can be strengthened. I very much hope that it can follow the example introduced last year in England.

Danny Alexander: The Council of Mortgage Lenders was one of the participants in November's housing summit in Inverness that was organised by the Highland council. One of the summit's major conclusions was that much more needed to be done, especially at the Scottish Government level, to free up funding for housing associations. The lack of funding is restricting and slowing down housing associations' ability to build more affordable housing, whereas what should be happening is that that activity should be accelerating. Did the Council of Mortgage Lenders mention that to the Minister, and what action is being taken to apply pressure on the Scottish Government to release the funds needed to get house building going in the highlands?

Ann McKechin: It is something that we have discussed and will continue to discuss. It is clearly important to stimulate the housing market, especially social housing, throughout the UK, and that is why we have introduced packages to that effect in England and Wales already. It is important to increase the amount of social housing available in Scotland to meet the very high demand that exists already and to stimulate the housing market in general.

Mark Lazarowicz: My hon. Friend has mentioned that a working party has been established to look at repossession protocols in Scotland, but that has happened four months after the UK Government took action. The process is much too slow, and home owners in Scotland do not have the same protection in the courts as their counterparts in England and Wales. Will my hon. Friend call in Nicola Sturgeon, the relevant Scottish Minister, and make sure that she addresses the issue as urgently as the UK Government are doing, so that the UK and Scottish Governments can work together in a joined-up manner?

Ann McKechin: My hon. Friend has a long history of providing support and advice for people with personal debt problems, but the momentum in Scotland for repossessions has been growing. For example, Mike Dailly of the Govan law centre has drawn to our attention the fact that the number of repossession proceedings in Scotland has increased rapidly. It is important appropriate protocols to put in place at the earliest opportunity and without delay, and extend the network of sheriff court advice centres. At present, there are advice centres in only seven of Scotland's 49 sheriff courts, but it is important for people to be able to get advice as soon as they face the threat of repossession.

Defence Policy

Andrew Pelling: If he will hold discussions with the Secretary of State for Defence to draw up a contingency plan for defence policy in the event of Scottish independence.

Jim Murphy: I have no plans to have such discussions with the Secretary of State for Defence.

Andrew Pelling: Is that not a rather irresponsible position to take, bearing in mind the fact that it is clearly within the rights of the Scottish nation to decide to leave the United Kingdom, and bearing in mind the significant role that the Scottish nation has played over the years in the defence of the British isles? Surely it would be responsible of the Government to have such contingency plans in place.

Jim Murphy: The hon. Gentleman is right to say that the defence footprint is significant in Scotland, where 17,000 service personnel and civilians are employed by the Ministry of Defence. The defence industry in Scotland generates about £2.3 billion. All I would say is that there has never been majority support for independence for Scotland. The fact is that the longer the Scottish National party Government are in power in Scotland, the greater the deficit in support for independence becomes. Support for independence in Scotland is, in percentage terms, in the mid-20s. There is not a mandate for independence, and it would not be appropriate to have such conversations.

Gavin Strang: I agree with my right hon. Friend. On the defence industrial strategy, will he take every opportunity to remind his right hon. Friend the Secretary of State for Defence of the huge Scottish and British asset right at the sharp end—the forefront—of manufacturing, namely Selex, owned by Finmeccanica? Aerospace and avionics are engineering sectors in which Britain still leads. Will he take every opportunity to remind his colleagues of the importance of that facility to our defence, our industry and all military procurement, including Eurofighter?

Jim Murphy: My right hon. Friend is absolutely right. In Scotland, about 16,000 people are directly employed in the defence and aerospace industries, including in the areas to which he alluded. It is an enormous, important part of the Scottish economy, and it is a part of the Scottish economy that can continue to grow in the current economic downturn. It can fuel Scotland's continued success in future years.

Angus Robertson: But in the past 12 years there has been a cut in service personnel, bases have been closed, regiments have been axed, and less than our share, in terms of population and tax contribution, is spent on procurement in Scotland. Those are the facts. Why should we put up with that? There is also the fact that Scottish service personnel were committed to illegal wars opposed by the people, and the fact that Trident was based in Scotland—a decision that was also opposed by the people.

Jim Murphy: I recently had the great honour of meeting the Royal Scots Dragoon Guards in Germany, and the whole House—certainly those on the Labour Benches, and almost everyone in the Opposition parties— would talk with great pride of the work that they did, in a remarkable, brave way, to defend democracy in Iraq. The fact is that if the hon. Gentleman had his way, there would be no Royal Navy, no Royal Navy aircraft carriers, and no Royal Navy jobs on the Clyde, in Rosyth or anywhere else. He and his policies are putting in jeopardy thousands of Scottish jobs in the manufacturing base, so it is no wonder that support for independence for Scotland continues to fall.

Brian H Donohoe: I speak as someone who gained from an apprenticeship in a shipyard in the west of Scotland. On shipbuilding, orders are being placed on the Clyde as a consequence of our having a United Kingdom, and that is resulting in more apprenticeships on the Clyde. Does my right hon. Friend agree that that is a good thing?

Jim Murphy: My hon. Friend is absolutely correct. There have been recent announcements about recruiting more people to shipbuilding apprenticeships on the Clyde. If it were not for Royal Navy orders for the Clyde area and other parts of Scotland, there would be no ships on which apprentices could learn their skills. I could not put the matter any better than BAE Systems did when it gave evidence to the Scottish Affairs Committee: it said that without Royal Navy orders,
	"There would not be a ship building business."
	If the Scottish National party had its way, there would be no Royal Navy orders because there would be no Royal Navy.

Menzies Campbell: The Secretary of State clearly knows the contribution that RAF Leuchars in my constituency has made to British defence for a very long time. He has told the House of the total contribution of defence expenditure to the Scottish economy. Will he consider a study of the contribution that individual defence installations make to their local economy, to include RAF Leuchars and also, perhaps, Faslane?

Jim Murphy: The right hon. and learned Gentleman raises an important point about the specific contributions made by RAF Leuchars and Faslane. I am aware that, for example, in Argyll and Clyde about 6,500 defence jobs are reliant on MOD work. On Leuchars, I am happy to discuss with him what specifically we could do to raise the profile of the work of the personnel there and across Scotland, but it is a matter that I would have to discuss in more detail with my right hon. Friend the Secretary of State for Defence.

John Robertson: I thank my right hon. Friend and our right hon. Friend the Secretary of State for Defence for all the thousands of jobs for people in my constituency on the Clyde working on the Type 45 and, hopefully, soon on the carrier. Will he not listen to Opposition parties, one of which would have closed the Clyde down before the last election, and the other which supported it in order to try to get rid of a Labour Government? They offer nothing to help the workers in Scotland or the workers in the defence industry.

Jim Murphy: Again, my hon. Friend is typically correct when he talks about the importance of the shipbuilding on the Clyde that he and other Glasgow Members have championed for some years. Our armed forces are part of our shared heritage—that of Scotland and the United Kingdom—and the Government will do all we can to protect and preserve that for many years to come.

Ben Wallace: It is perhaps tempting to remind the House of the Scottish National party's military adviser, Colonel Crawford, who once proposed chemical weapons as a cheaper alternative to the nuclear deterrent in Scotland. May I urge the Minister not to waste any time or money on making unlikely and unnecessary plans for Scottish independence, which would see the demise of the defence industry in Scotland, and may I remind the House that our Army is better because of Scottish soldiers, and Scotland is safer because of the British Union?

Jim Murphy: The hon. Gentleman is correct: Scotland is stronger because of the Union and the United Kingdom. There is remarkable pride and passion across Scotland about the enormous contribution made by Scots as part of the United Kingdom armed forces. We will continue to oppose plans by the SNP, of course. Much more important is the fact that the vast majority of Scots refute the suggestions from the SNP that we should break up Britain and destroy the UK armed forces.

Claimant Count

John Mason: What recent discussions he has had with the Secretary of State for Work and Pensions on the projected claimant count in Scotland in 2009-10.

Jim Murphy: I have regular discussions with my right hon. Friend the Secretary of State for Work and Pensions about how to support those people who lose their jobs in Scotland and the rest of the UK.

John Mason: Is the Secretary of State concerned that a further £1 billion of cuts in the coming two years will mean a huge number of job losses in Scotland?

Jim Murphy: I would have expected the hon. Gentleman to reflect on the fact that, as part of the pre-Budget report, an extra £2 billion is going into the pockets and purses of Scots to support them through these difficult times. Scotland being in the United Kingdom makes Scotland more prosperous in good times and help us to insure against the most difficult times when we face crisis, such as the world faces now. Most Scots appreciate that we are stronger together and would be much weaker apart.

Anne McGuire: From his discussions with my right hon. Friend the Secretary of State for Work and Pensions, my right hon. Friend will be aware of the support that is now embedded to help the long-term unemployed into work. When he meets the First Minister, will he raise my concern that nothing has been done in Scotland to match the skills and training element of that support, which is available elsewhere in the United Kingdom?

Jim Murphy: My right hon. Friend is right. We need to make sure that today's newly unemployed do not become the long-term unemployed of tomorrow. We will discuss those issues with the First Minister and others when we meet in Glasgow next month. We are putting in place welfare reform proposals and increasing the investment in Jobcentre Plus because we will not walk away from our responsibility to the newly unemployed in Scotland and the rest of the UK.

Robert Smith: The Secretary of State is right to say that preparations need to be made to deal with the inevitable rise in unemployment as a result of the economic crisis. Will he also recognise that the best thing to do is to minimise the number of job losses? To that end, what are the Government doing to try to ensure maximum investment in the North sea during the current credit crisis? The traditional lending markets are drying up.

Jim Murphy: The hon. Gentleman is right about the importance of North sea oil and gas. I met representatives of the industry last week and, along with the Secretaries of State for Business, Enterprise and Regulatory Reform and for Energy and Climate Change, I will do so again in the next couple of weeks. It is crucial that we continue investment in the North sea, to access oilfields and gasfields that we have not got to in past decades; I am thinking in particular of the enormous untapped resource west of Shetland. We need to do all that we can to support the industry to exploit that.

Michael Connarty: As people begin to get worried about the rising claimant count, does my right hon. Friend accept that there are concerns in the oil and gas industry and energy companies such as INEOS, which he visited recently with me? However, those concerns are covered in Scotland by the national agreement for the engineering construction industry, or NAECI—made by the companies and Unite—under which the companies draw from within a 40-mile zone in Scotland. The concern in Scotland is that if workers were denied the right to work outwith Scotland, many with high skills would be unemployed. We need more high skills in Scotland to allow people to get the jobs available in the oil and energy industry.

Jim Murphy: My hon. Friend is right. I recently met representatives of INEOS and at the weekend I met shop stewards from Longannet and Grangemouth—both places out on strike. It was a helpful and constructive conversation. It is clear that the workers are concerned because of the economic climate and are worried that European law is preventing them from having a level playing field when it comes to employment opportunities. It is essential that those workers are able to compete on a level playing field, that European law is applied equally and that British workers are able to compete for jobs in Britain. We make it absolutely clear, along with the companies, that that is exactly the situation that should and must apply in the UK—and, in most cases, we believe that it does.

David Mundell: Will the Secretary of State admit that on the basis of the warnings from the International Monetary Fund and the Fraser of Allander Institute, his Labour Government have led Scotland not just into recession but to the brink of becoming the worst hit part of the worst hit country in the developed world? Does he agree that at such a time, Scotland does not need a do nothing Secretary of State? It needs him to bring the UK and Scottish Governments together to combat this recession. Can he tell Parliament how many times the Prime Minister has met the First Minister to discuss the recession? How many times has he himself done so?

Jim Murphy: I do not keep the Prime Minister's diary, but I have announced that the First Minister, the CBI, the STUC and I will be coming together. We will look at what happened during previous recessions in the United Kingdom. We will look at the position of the Government in power at those times, who said that unemployment was a price worth paying. We will do the opposite. Unemployment is never a price worth paying, and we will do everything that we can to prevent the long-term generational unemployment that typified the Tory approach to previous recessions.  [Interruption.]

David Mundell: rose—

Mr. Speaker: Order. I say to hon. Members that it is far too noisy in the Chamber. That is unfair to those who are here for Scottish questions.

David Mundell: I think we can take it that the answer to the question about the number of meetings between the Prime Minister and the First Minister to discuss the recession is none. The people of Scotland will find it deeply disappointing that there has been so little, and such acrimonious, dialogue between their Prime Minister, Secretary of State and First Minister in the face of such a serious crisis. I say to the Secretary of State that under a Conservative Government things would be very different, because Scotland's interests would be put first. Perhaps the Secretary of State can tell us: is it that the Prime Minister has been so busy saving the world that he has not had time to save Scotland, or that he simply puts partisan political interests ahead of Scottish business interests?

Jim Murphy: There we have it. The Conservatives' approach would be entirely different. We know that from their history: long-term generational unemployment; incapacity benefit numbers trebling; a poll tax in Scotland first; no investment whatever in public services; and child poverty higher in the United Kingdom than in any industrialised nation in the world. Yes, there are enormous differences between the two parties. We believe in investing in these economically difficult times; the Conservatives are out of touch with the mainstream across the world, including new President Obama. On that basis, they are economically illiterate and politically isolated.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Karen Buck: If he will list his official engagements for Wednesday 4 February.

Gordon Brown: Before listing my engagements, I am sure that the whole House will wish to join me in expressing our profound condolences to the family and friends of Corporal Danny Nield of 1st Battalion The Rifles, who was killed in Afghanistan last Friday. We owe him, and all who have lost their lives, our gratitude for their service. Our armed forces show us week in and week out their courage and commitment, and we will never forget those who have shown such dedication.
	This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further meetings later today.

Karen Buck: The whole House will wish to send our deepest sympathy to the family of Corporal Nield.
	We are experiencing the worst winter weather for 20 years, but new evidence shows that fuel companies are not cutting fuel bills as their costs reduce. Meanwhile, energy giant BP has just posted £14 billion in profits. What urgent further steps can my right hon. Friend take to reassure pensioners and families who are worried about their fuel bills this winter?

Gordon Brown: First, I pay tribute to the emergency services for the way that they have dealt with all the troubles and difficulties that have arisen from the cold weather. We are determined to provide real help to people who are facing difficulties with their fuel bills, including pensioners who are worried about their ability to turn on their heating at a time when the weather is really cold. So in addition to the money that we have provided through the winter allowance, with 12 million pensioners who benefit by £250 or £400 this year, and at the same time as the £60 that we are giving to every pensioner now—it has been paid out in the past few days—I can also confirm that this Monday half a million vulnerable families became eligible for payments of £25 on the basis of future weather forecasts. Let me also say that 5 million people will get cold weather payments this week, and we will continue to make payments whenever the weather is so poor.

David Cameron: I join the Prime Minister in paying tribute to Corporal Danny Nield, killed in Afghanistan on Friday. We should offer our deepest sympathy to his family and his friends at this time.
	Does the Prime Minister share my concern at the decision by the US House of Representatives to pass "Buy America" legislation, and does he agree that a retreat into protectionism is the last thing that the world needs? Yesterday, the Prime Minister's spokesman refused to confirm that he would specifically condemn these moves. Will the Prime Minister make clear his position today?

Gordon Brown: I have made it clear throughout the past few months that the biggest danger that the world faces is a retreat into protectionism. I have also made it clear that, as a result of the withdrawal of foreign banking capacity in large numbers of countries, we face a downward spiral whereby these countries cannot borrow from anybody because foreign banks have left. That is all the more reason why, first, we should sign the Doha agreement—that will feature on the G20 agenda—and secondly, we should ensure that every country is analysed by the World Trade Organisation on what it is doing to prevent protectionism. It is also absolutely clear that we should agree, as a world, on a monetary and fiscal stimulus that will take the world out of depression.

David Cameron: The two countries that most need to give ground to achieve action on the Doha round—India and the US—will both be present at the G20. As the Prime Minister said, the aims of the G20 refer to advancing the Doha trade round. Should we not be clear that anything less than removing the barriers to agreement would represent a failure?

Gordon Brown: I tried very hard before Christmas to talk to both President Bush and the Indian Prime Minister so that we could make progress on this. There are actually only two issues that are left to be decided. The first is a safeguard clause for when there is a surge in imports in any poor country, and the second concerns negotiations on sectorals—different sectors of industry—and how those could be concluded. By the time President Bush had left office, he had made it clear that he would be able to accept the wording on the sectoral agreements, and the Indian Prime Minister has said to me that he wants to make progress on the safeguard clause.
	It is now up to President Obama and the Indian Prime Minister to say that they can accept the terms of this agreement. If that were so, we would have a conclusion of the first round of the Doha negotiations. That is in the interests not just of our country, but of the poorest countries in the world, which are now facing poverty as a result of the industrial downturn. Those two issues can be resolved, and I will work very hard to resolve them in the next few weeks.

David Cameron: The point is that if we do not get a conclusion to the Doha round, the existing policy space allows countries to double the level of tariffs. Everyone can hear that the Prime Minister says that it is important to avoid protectionism, but is he not himself guilty of encouraging protectionist sentiment? Does he agree that use of the slogan "British jobs for British workers"— [Interruption.] Does he agree that using that slogan showed a lack of judgment, and does he now regret it?

Gordon Brown: First, on the trade negotiations, let us be clear that we have done everything in our power. The Brazilians have come on board; the Argentinians have come on board; the South Africans have come on board; the rest of Europe has come on board. It is important that we make all the efforts we can with other countries to get this trade agreement. Pascal Lamy, the head of the WTO, has just published a report on the protectionist tariffs that are being imposed by different countries during the present downturn. At the moment, those tariffs are limited and it is important that we continue to see that they are limited.
	On the second question, can anybody here say that they do not want British workers to get jobs in our country? Can anyone here say— [ Interruption. ] Can anyone here say that they do not want us to help British workers get the skills necessary to get jobs? Let me also say that in an open environment and a global economy where there is competition for jobs, it is crucial that we do everything in our power to help people get the jobs that are available. That is why we are investing in apprenticeships; that is why we are investing in helping the unemployed get back to work; that is why we have a new deal; that is why we are increasing public investment. The pity is that the Opposition do not support us, because they want to do nothing.

David Cameron: Does the Prime Minister not understand that when he spouted his slogan, what he was doing was opportunistic, protectionist— [ Interruption. ]

Mr. Speaker: Order.

David Cameron: He was pandering to people's fears and he knows it. This is what the Chairman of the Home Affairs Committee, his former Europe Minister, had to say. He said that the slogan
	"lacks credible arguments"
	and
	"appears to amount to little more than employment apartheid" .
	He was asked to repeat the slogan, and because he has got some judgment he refused. Let me ask the Prime Minister again: is not the use of this slogan an error of judgment and a huge mistake, and should he not apologise instead of twisting?

Gordon Brown: I have already shown that we are far from protectionist as a Government. We are trying to get a world trade agreement. I have already said to the right hon. Gentleman—he does not want to listen—that in an open, global environment where there is competition for jobs, it is our duty to help British workers get the skills necessary for jobs. As far as opportunism is concerned, I have to tell him that there is nothing more opportunistic than his saying in the autumn that he wanted to give all-party support to this Government's efforts to take us out of a global financial crisis and then, the next moment, withdrawing all that support. That is opportunism.

David Cameron: Does the Prime Minister not understand that he is taking people for fools again? At international summits, he lectures the world on the evils of protectionism, but back at home, with his slogan "British jobs for British workers", he is pandering to protectionist fears. Does he not understand that he has been found out?

Gordon Brown: Let me just bring the right hon. Gentleman up to date with what is happening in the industrial dispute, so that he realises what is going on. An ACAS proposal has been put to the work force, and I hope that they will now accept it despite their initial reservations. I can also tell him that the construction and engineering association has issued new guiding principles for companies to consider when using non-UK contractors and labour on engineering construction sites. I hope that the whole House will welcome the fact that it now states in the new advice:
	"Always consider whether there are competent workers available locally. If there are, it is good practice for the non-UK contractor to explore and consider the local skills availability and to consider any applications that may be forthcoming."
	That is the common-sense way of dealing in practical terms with the difficulties that we face.

David Cameron: Does the Prime Minister not realise that one of his problems is that he refuses to admit mistakes, even when those mistakes stare him and the whole country in the face? He says "British jobs for British workers" when he knows that it is not deliverable. He says that he ended boom and bust when we are in the deepest recession for a generation. He says that our economy is well prepared when the IMF says that we are going to have the deepest recession of all. I have to tell him that he should just look behind him—they are so ashamed of what he has said about British jobs for British workers.  [Interruption.] Let me ask him one final time— [Interruption.]

Mr. Speaker: Order. Mr. MacShane, behave yourself.

David Cameron: I do not know why the right hon. Member for Rotherham (Mr. MacShane) is shouting—it was he who specifically criticised the Prime Minister for using that phrase. He said that
	"every politician from a Prime Minister down to the most junior"
	Member
	"in the House of Commons has to choose their words carefully."
	 [Interruption.] I think that the right hon. Gentleman will have to learn to shout carefully, too.
	Let me ask the Prime Minister one final time: was not using that phrase an error of judgment and a big mistake, and will he make a promise not to do it again?

Gordon Brown: The biggest error of judgment would be to do nothing during this period of the world downturn. The biggest error of judgment would be to fail to invest in the economy and help people get the skills that are necessary for jobs. We are creating 35,000 apprenticeships, we are helping 500,000 people into work and we are investing in the construction industry to create more jobs. The right hon. Gentleman goes around the world talking the pound down; he goes around the world saying that we are going to have to go to the IMF; he goes to Switzerland and says that the British economy is weak. He has decided that it is in the interests of the Conservative party to talk Britain down, and he should be ashamed of himself.

Robert Flello: I am aware of several potential bidders to save Wedgwood and the hundreds of jobs affected in north Staffordshire. Although the administrators seem to be doing a very good job of keeping things running, I am worried that they are rapidly running out of time. Will my right hon. Friend look at what Government support can be given to assist the administrators to ensure that Wedgwood can keep running while they consider all potential bidders to save it?

Gordon Brown: I am grateful to my hon. Friend, who has taken a huge interest in this matter. We did try to help Wedgwood over the Christmas weeks, to see whether the company could be saved before it went into administration. I am very happy to talk to him about how we can speed up the process to help British workers there, and I am very happy to meet him to do so.

Nicholas Clegg: I add my expressions of sympathy and condolence to the family and friends of Corporal Danny Nield, who tragically lost his life serving this country and the people of Afghanistan in Helmand province.
	Week after week, I have been asking the Prime Minister why he is not getting tough on tax avoidance. Every time, he tells me that he is doing all that he can. This week, newspapers have confirmed that big companies are using loopholes to get out of paying £14 billion in corporation tax alone. Instead of going on about British jobs for British workers, is it not time that he went on about British taxes for British companies?

Gordon Brown: This needs not only the efforts that we are making to clamp down on tax avoidance and tax evasion, but an international agreement. The right hon. Gentleman may be aware that there is a case in America at the moment in relation to Swiss tax avoidance. Once it is resolved, I believe that it is possible to get an international agreement for the exchange of information about tax cases. That would be the way to move forward our proposals for the exchange of information on tax and clamping down on tax evaders.

Nicholas Clegg: The Prime Minister is living in denial. He created a system that lets big companies run rings round the Treasury, lets peers in the other place not pay their full taxes in this country and allows City bosses to pay less in tax on their capital gains than their cleaners pay on their wages. He is losing this country billions of pounds, which could be used to give big permanent tax cuts to ordinary families. Why should anyone trust him when he makes one rule for the fat cats and another for everyone else?

Gordon Brown: I remember that the chief donor to the Liberal party got into real trouble because he was a tax evader, and the Liberals never returned the money. Perhaps it is the leader of the Liberal party who is in denial at the moment.
	We do everything we can, and will continue to do so, Budget after Budget, to remove the possibility of tax avoidance and tax evasion. In the end, it will need what the right hon. Gentleman should support—an international agreement. In the light of the Swiss case in the United States of America, I hope that we can make big progress on that, and I hope that the hon. Gentleman will support it.

Sandra Osborne: Over the weekend, 400 job losses were announced in my constituency, with the closure of the Stampworks in Ayr, the last truck axle manufacturer in the UK, and 145 job losses in Girvan—work is being transferred to Norway from one of the few sizeable employers in the Girvan area. Will the Prime Minister agree to meet me to discuss what can be done to help?

Gordon Brown: I know that my hon. Friend takes a huge interest in increasing employment and ensuring that employment opportunities are available in her constituency. We have talked on many occasions about how we can get more jobs into that area. I would be happy to meet her to discuss these particular redundancies and see what we can do. If the jobs cannot be saved, it is important that we help people get back into work quickly—200,000 people a month can still get new jobs and there are half a million vacancies in the economy. While I understand the feelings and sentiments of people who are in danger of losing their jobs, and I feel for them at this difficult time, we will do everything we can to help them back into work.

John Pugh: Given yesterday's decision by Ocean Parcs and Pontin's to create 2,000 new jobs and invest £50 million in seaside resorts, including £10 million in Southport, does the Prime Minister agree that, especially in a recession, the time is right to promote British holidays for British and non-British people?

Gordon Brown: I agree with the hon. Gentleman about the importance of the announcement by Pontin's yesterday of a £50 million expansion plan. I know that Southport will benefit from that with extra jobs. I can also tell him that, in addition, Southport will receive a £4 million grant to help create a new cultural centre in the area under the Department for Culture, Media and Sport's sea change programme, which aims to regenerate coastal areas. We will continue to do our best to create jobs and to boost the British tourism industry, which, I believe, will do well this summer.

Jim Cunningham: Given the need for social housing, for retaining skills in the construction industry and for people to get mortgages, will my right hon. Friend consider allowing local authorities to introduce mortgages and, secondly, to build council houses?

Gordon Brown: I am grateful to my hon. Friend, who has pushed this matter for many years, since he was a local authority leader. The decline in mortgage lending is mainly the result of the loss of capacity in the mortgage market. So even if existing banks lend more to home owners, the loss of foreign and other capacity in the market makes it more difficult for people to get mortgages at a price that they can afford. That is why we are saying that local authorities that already have the power to issue mortgages should be encouraged to do so, and why the Minister for Housing has announced a lowering of the standard interest rate. We are now considering what more we can do to help individuals and households meet their housing needs. I hope that the answer I give my hon. Friend on his 68th birthday is acceptable.

Anne Milton: The south-east plan will change the face of Guildford for ever. Of 74 local authorities, more than half the responses to the consultation so far have come from concerned Guildford residents. Will the Prime Minister tell us just how many people need to say no before he scraps the ill-thought-out, ill-conceived and unsustainable south-east plan? How many?

Gordon Brown: I think that the hon. Lady would also accept that the draft plan designates Guildford as a regional hub, as a focus for transport growth and investment. These changes were made following the recommendations of the independent panel of inspectors who examined the draft plan. The final plan will be published in the spring. The Government are still looking at the responses to the consultation. The Government remain committed to the green belt. This is a selective review of part of the metropolitan green belt and we will listen to all responses that have been made.

Colin Burgon: Does the Prime Minister agree that the threat to British workers does not come from other European workers, but from the workings of the unregulated capitalism that is enshrined— [ Interruption. ] On this, Mr. Speaker, there can be no cross-party consensus. What I am asking the Prime Minister is this: will he support calls to reform the— [ Interruption. ] They have knocked me off balance. Will he support calls to reform the posted workers directive, in order to bring some fairness back into the workplace?

Gordon Brown: We all agree about the need to introduce reform in financial regulation and we will be announcing further plans to do so very soon. However, I think that my hon. Friend agrees with me that this has to happen at the international level, as well as the national level, and I hope that the Conservatives will recognise that. As for the posted workers directive, an expert review has been set up in the European Union to look at the impact of the Laval, Viking and other judgments, and a group of employers and the work forces are also meeting to review that at the same time. When they reach their conclusions, we will look at what they have to say.

Peter Bottomley: Is it responsibility for the past or concerns for the future that the Prime Minister thinks is the dominant influence on his poll rating and the fear on the faces of those behind him?

Gordon Brown: The answer to the problems that we have today is not to do nothing, as the Conservative party says it is. I have the manifesto of the Conservative group in the European Parliament, and what does it start by saying?
	"The financial and economic crisis should not be taken as an excuse to do nothing".
	Even the European Conservatives agree on the need for action.

Natascha Engel: Free bus travel for the over-60s has given thousands of pensioners in Derbyshire their lives back. Many, however, are absolutely furious that some unscrupulous bus companies seem to be issuing tickets for far longer journeys than people have made and then overcharging local authorities. Can the Prime Minister reassure pensioners in Derbyshire that any such practice will not jeopardise a service that many older people have come to rely on?

Gordon Brown: This extension of free and concessionary travel to elderly people is one of the emancipating forces of our time, because it allows people to travel round the country and not just in their local areas. We have invested £212 million in this new, extra funding for travel. If there is any problem that my hon. Friend brings to the attention of the Secretary of State for Transport, he will of course look at it, but the truth is that this scheme is a big investment in older people, to help them become more mobile in the later years of their lives.

John Butterfill: Just over a week ago I tabled a question to the Chancellor of the Exchequer, asking about the scrutiny and conditions imposed by the Financial Services Authority when the Chelsea building society sought to establish an offshore bank in Guernsey. I received a reply from the Economic Secretary to the Treasury, the hon. Member for Dudley, South (Ian Pearson), which said:
	"The matters raised in this question are the responsibility of the Financial Services Authority, whose day to day operations are independent from Government control and influence."—[ Official Report, 29 January 2009; Vol. 487, c. 682W.]
	In the nearly 26 years I have been in this House, I have never known a senior Minister refuse to answer a question on a subject where he had responsibility. I am sure that the Prime Minister, when he created the Financial Services Authority, did not intend it to be exempt from scrutiny by this House, and I would be grateful if he would confirm that.

Gordon Brown: We set up a unified Financial Services Authority and this House of Commons gave it the legislative power to take the action necessary to deal with the regulation of individual institutions. Of course we are now looking at the powers and the responsibility of the Financial Services Authority for the future. If the hon. Gentleman wishes to raise this individual matter with me, I am very happy to look at it, and I know that the chairman of the Financial Services Authority will be writing to him soon.

Brian Iddon: Given that between 35 and 60 per cent. of the agricultural industry has now been destroyed across the Gaza strip, and that only one crossing point is open through which to import goods, will my right hon. Friend ask the Israelis why they are ignoring the pleas of the United Nations Relief and Works Agency and of non-governmental organisations such as Oxfam and the World Food Programme to open all the crossings so that the humanitarian crisis on the strip can be properly addressed?

Gordon Brown: My hon. Friend is absolutely right to say that the Israeli Government have a responsibility to help humanitarian help to get into the Gaza area. I have just written to Prime Minister Olmert asking him to take urgent action to ensure that the crossings are open so that the lorryloads of help can be brought into the area. I am urging him to open the crossings and also to provide proper humanitarian access. I think that people know that the UK has trebled its humanitarian efforts. I have been talking to leaders in the Arab countries about what more they can do, and there is a conference in Egypt over the next few days to pool the resources to ensure that humanitarian help is available not only to provide immediate aid but to rebuild the Gaza area. I believe that all Members of the House will want to see aid getting into Gaza as quickly as possible.

Andrew George: The Competition Commission reported last year that the large supermarkets
	"transfer excessive risk and"—
	unexpected—
	"costs to suppliers",
	which is damaging consumer interests and detrimental to farmers and growers, both here and in the developing world. Does the Prime Minister agree that the commission's proposed remedies to tackle this problem should now be implemented without further delay?

Gordon Brown: The hon. Gentleman is absolutely right to highlight this problem—first, because of the failure to introduce early payment to many of the suppliers. We are asking the supermarkets to do that. Secondly, in relation to developing countries, we have been in talks with supermarkets such as Asda about how they can source their produce from those countries at a fair price. We will continue to push that as quickly as possible.

Hywel Francis: On 12 February, the globalisation report will be published by the Welsh Affairs Committee. One of the key themes of the evidence that we received from witnesses was the importance attached to higher-level skills to build the knowledge economy. Will the Prime Minister give serious consideration to the report's recommendations, particularly in the context of the present restructuring in the steel industry, of the demands by the steel unions for better opportunities for skills training, and of the coal industry, which is now reviving and could face a skills shortage? Does my right hon. Friend agree—

Mr. Speaker: Order.

Gordon Brown: I agree with my hon. Friend about the need for more investment in skills and training in Wales and the rest of the country. Through the Assembly, Wales has developed a new programme called ProAct to help people to stay in jobs rather than be made unemployed, and a great deal of work is being done by us to look at that scheme and at how it could apply to other parts of the United Kingdom. We are also putting aside £250 million for training opportunities during the course of this downturn, and we are determined to do everything we can to help people to get into the jobs that are available.

Brian Binley: A quarter of all council tax is now used to pay for local authority pensions. A former chief executive of Northamptonshire county council left his job 18 months ago at the age of 52 with a lump sum payment of £291,000 and a £97,000 a year index-linked pension, which is costing the county £600,000. Nice work if you can get it! When will the Government have the courage to tackle this national pension outrage?

Gordon Brown: The first thing I should say to the hon. Gentleman is that it is a Conservative council that he is referring to, and the second thing is that most local authority workers do not have that level of pension entitlement. I hope that the Conservative party is not going to make the mistake of identifying one case as representative of what is happening to ordinary local authority workers who, as we found with the emergency services, do a good job when called upon to do so.

David Clelland: Rumour has it that the Under-Secretary of State for Transport, my hon. Friend the Member for Gillingham (Paul Clark) will be in the north-east next week to launch the initial implementation of the Local Transport Act 2008. This is a good Labour Act which has the potential to bring about the biggest improvement in public transport for many decades, but is my right hon. Friend aware that the Conservative party is committed to repealing the Act if it ever comes to power? Is that not just one more good reason for people to vote Labour at every possible opportunity?

Gordon Brown: I am surprised at the Conservative attitude to public transport, particularly the need to improve bus services around the country. I believe that the new transport Act has been widely welcomed because it recognises that country buses in particular are a lifeline to many communities. The Act is about giving options to local authorities, not being prescriptive about what they should do. It is for local authorities to take advantage of the new powers. My hon. Friend is telling me that Labour local authorities will take that advantage; I hope that Conservative authorities will serve their public as well.

Patrick Cormack: As the Prime Minister is understandably anxious to exercise national leadership in these difficult times and as he must understand that national leadership depends on a degree of consensus, will he invite my right hon. Friend the Leader of the Opposition and the leader of the Liberal Democrats to No. 10 Downing street to see whether common ground can be found among them?

Gordon Brown: I am afraid it has been very difficult to find common ground, even across the Dispatch Box today, on how we deal with the problems of the economy. The hon. Gentleman may remember that in October there was talk of all parties working together to solve the economic problem. The Leader of the Opposition and his shadow Ministers were given access to the Bank of England and to the Treasury to find out what was happening; unfortunately, a week later, they withdrew their support. I am very happy to work with all parties to deal with the problems we face. I am very happy to work with all parties so that we can have the fiscal stimulus that is necessary. I am happy to work with all parties to ensure that we invest properly in the future. I hope that the Conservative party will change its position on those issues, so that that co-operation could happen.

BILL PRESENTED

Apprenticeships, Skills, Children and Learning Bill

Presentation and First Reading (Standing Order No. 57)
	Secretary Ed Balls, supported by the Prime Minister, Mr. Chancellor of the Exchequer, Secretary Jack Straw, Secretary Alan Johnson, Secretary Hazel Blears, Secretary James Purnell, Secretary John Denham, Secretary Paul Murphy, Jim Knight, Mr. Siôn Simon and Sarah McCarthy-Fry presented a Bill to make provision about apprenticeships, education, training and children's services; to amend the Employment Rights Act 1996; to establish the Young People's Learning Agency for England, the office of Chief Executive of Skills Funding, the Office of Qualifications and Examinations Regulation and the School Support Staff Negotiating Body and to make provision about those bodies and that office; to make provision about the Qualifications and Curriculum Authority; to make provision about schools and institutions within the further education sector; to make provision about student loans; and for connected purposes.
	 Bill read the First time; to be read a Second time tomorrow , and to be printed (Bill 55) with explanatory notes (Bill 55-EN).

Exercise of Reasonable Discretion

Motion for leave to introduce a Bill (Standing Order No. 23)

Tim Boswell: I beg to move,
	That leave be given to bring in a Bill to provide that public authorities and public servants shall not be subject to any criminal or civil penalty as a result of the exercise of reasonable discretion in the performance of their functions; and for connected purposes.
	This Bill is about advancing common sense and fighting bureaucracy. I owe its rather strange long title to my right hon. Friend the Member for North-West Hampshire (Sir George Young), my friend and supporter of the Bill. There is, of course, a mild irony in the title because it is itself an exercise in bureaucratic speak. It resembles my favourite rule in my college library—rule 6, which is that "No one is to mark or deface any book or other property of the library", alongside which someone had added, very neatly in ink, "Hear, hear"!
	The formal intent of the Bill is to indemnify public servants, central government, local government and other public agencies from legal action if they had taken decisions motivated by common sense, whatever the rules strictly said. I shall come on in a few moments to the underlying thought, but at the outset let me first get three potential criticisms out of the way. The first is that what I propose is so self-evidently sensible that it is already part of our law and practice. It is true that there are common-law precedents—as well as modern practices such as that of Her Majesty's Revenue and Customs, which explicitly uses extra-statutory concessions that go beyond tax law—but however sensible those measures are, they do not establish a general principle or cover every case. A second objection might be that the Bill in some way represents a charter for vexatious litigation and legal challenge, but I would maintain that the legal concept of reasonability is by now well established. My intention is to fight off unnecessary legislation, far from encouraging it.
	I imagine that it might suit some opponents of the Bill to paint me as some kind of anarchist, denying the proper function of rules in a modern society. It is, perhaps, rather unlikely that a former inhabitant of the Whips Office would undergo such a deathbed conversion, and I assure the House that I have not—but I think that even the best and most well-honed rule book must be interpreted in the light of the facts, if only because rules often clash with one another.
	That brings me to the substance of my case. There probably never was a golden age of balance between sensible rules on the one hand and the wise use of discretion on the other. I generally welcome the growth of judicial review since the second world war as a necessary curb on an over-mighty Executive and arbitrary decision-making processes. Nor is it wrong to ask for greater openness and transparency in our public affairs. However, all that can be taken to extremes, can exceed the bounds of common sense, and can actually harm us.
	The House will have noted that there has been a lot of talk about this issue recently, since the idea occurred to me but not, I think, because of that. Indeed, we have legislated, in the Compensation Act 2006, to try to curb the paralysis that threatened, for example, outdoor activities for young people when adult volunteers no longer felt able to take part in them because of implications of liability for reasons of health and safety and so forth. I believe, however, that the "mind your back" culture has seeped much more deeply into our national life, affecting and poisoning the whole of it.
	I nearly always respect the writings of Libby Purves. She is eminently sensible. Some months ago, she wrote in an article in  The Times:
	"We read too many stories about this craven, inhuman, poltroonish cowering behind rules and routines, and about individuals who get into trouble for momentarily breaching them in the name of humanity or sense."
	Retreat into the rules is an excellent bureaucratic bomb shelter. Its private sector equivalent would perhaps be the saying—now, I think, somewhat discredited, and certainly out of fashion—that no executive was ever fired for choosing to buy IBM computers. Incidentally, my Bill could be usefully adapted to include private sector employees engaged in the discharge of their duties, although it is not currently so drafted.
	Alongside every petty bureaucratic tyrant who relishes frustrating someone by finding a rule with which to do them down is an even worse and wider set of problems. They include the deterrent effect on decent public employees of the fear that any risk they might take could backfire if it were unsuccessful—if something went wrong—and, at the level of, say, a local planning authority, the fear that any decision, however sensible, might set a precedent for some other proposal.
	My final and, I think, my greatest bugbear is the collapse and deformation of public service into a hollow shell of process, and training courses undertaken not so much to improve competition or competence as to cover any threat of litigation. While it is always dangerous to comment on particular cases, I wonder, in the context of this week's events, how many decisions on school closures were made with an eye to the courts rather than in the interests of children and their families. Frankly, fear of liability seems to have more effectively stopped London this week than ever fear of Hitler did.
	My Bill is a simple one. It seeks to rebalance matters by providing a public authority or public official with the defence of exercising "reasonable discretion". It would support those who back their own professional judgment—and also, perhaps, all those who work hard on our behalf without a professional qualification, but who seek to do the best for their customers and to act both sensibly and responsibly.
	By establishing the principle of
	"the exercise of reasonable discretion",
	the Bill would strike a blow for a concept whose time has clearly now come. We need in our public life again to achieve what I would describe as a victory for common sense, and I believe this Bill would advance that.
	 Question put and agreed to.
	 Ordered,
	That Mr. Tim Boswell, James Brokenshire, Mr. Christopher Chope, Mr. David Kidney, Bob Russell and Sir George Young present the Bill.
	Mr. Tim Boswell accordingly presented the Bill.
	 Bill read the First time; to be read a Second time on Friday 6 March and to be printed (Bill 56).

Police Grant Report

Vernon Coaker: I beg to move,
	That the Police Grant Report (England and Wales) for 2009—10 (House of Commons Paper No. 148), which was laid before this House on 21 January, be approved.
	In December 2007, the Government announced provisional funding totals for the three-year period 2008-09 to 2010-11. Three-year funding settlements have been widely welcomed by police authorities. They enable authorities to develop medium-term financial strategies and control their spending better. Last year's multi-year pay deal for the police will also improve their medium-term planning. I confirmed the figures for 2009-10 on 26 November, with indicative figures for 2010-11.

Keith Vaz: I am grateful to the Minister for giving way so early in his speech. May I place on record my thanks to him—or his predecessor as police Minister—and the Minister for Local Government for meeting those police authorities that faced the prospect of a cap, and for hearing the arguments we put forward before making their final decision? That process of negotiation was extremely important in dealing with this issue.

Vernon Coaker: I thank my right hon. Friend, who chairs the Home Affairs Committee, for his remarks. He will know that my predecessors and I have tried hard to negotiate our way through these various matters.
	My written ministerial statement of 21 January confirmed that we are implementing the funding settlement for 2009-10 broadly unchanged from that previously announced. I am pleased to be able to tell the House that, in the context of an increasingly tight financial settlement, the funding settlement for 2009-10 remains a good and affordable one for the police service, building on considerable investment by Government and police authorities over a sustained period.

Several hon. Members: rose —

Vernon Coaker: I will give way after I have made a little more progress.
	Government grant for police services will have increased by more than £3.7 billion between 1997-98 and 2010-11, an increase of 60 per cent. That is a substantial additional resource. Together with the significant extra investment that police authorities have raised locally, grant increases have allowed the police to expand to meet the increasingly complex issues they are called to face. There are more police on the streets than ever before and there has been a 28.5 per cent increase in the police work force since 1997. The service now employs more than 235,000 people, which is an increase of 52,200 extra police officers and police community support officers. The number of staff officers is 140,539, which is an increase of 11.7 per cent. or 14,714 officers on the 1997 figure. Front-line police officers are supported by nearly 16,000 PCSOs and nearly 21,800 additional police staff, who are releasing officers for front-line duties.

Simon Hughes: We are all grateful to the police and to the Minister for his commitment. London—the Metropolitan police—gets an additional amount because of its national and capital city functions. Can he explain why it will have a below inflation increase and a below national average increase in its grant in the coming year, given the importance of the Met police and the importance of this capital city being seen to be leading the way in dealing with crime?

Vernon Coaker: The Metropolitan Police Service, in common with other police forces across the country, has received a significant increase in its funding over the past few years—indeed, it has received increases in its funding for next year. Negotiations on the funding for some of the counter-terrorism dedicated security posts are continuing and we will make announcements about that in due course. If the hon. Gentleman were to examine the investment not only in the Metropolitan police force, but in police forces across the country, he would see that significant additional investments have been made in each and every one of them.

Lembit �pik: I regard the Minister as being open to feedback and very proactive in his role. There is concern in the Dyfed-Powys police force about the long-term plans for the rural policing grant; it has been suggested that that could be homogenised into other funding. Although my area is blessed with an excellent police force and a relatively low level of crime, that force seeks reassurance that it will not lose out if the plans for that grant are changed. Will he give some guidance on his plans?

Vernon Coaker: We are trying to be fair to Welsh police forces. The hon. Gentleman will know that Welsh police forces outside the South Wales police force benefit from our giving them an additional approximately 15 million to ensure that they are funded in exactly the same way as police forces in EnglandI know that is welcomed in Wales. He also talked about the rule 2 grantsthe separate pots of money, such as the rural policing grants, that we put together in a single potand he will know that we have confirmed that we shall roll those forward for next year and that we have given the indicative levels for years 2010 and 2011. He will know that a review of the police formula is taking place and, doubtless, the comments that he made will be fed into the review to ensure that they are taken account of in any revised police formula for the next comprehensive spending review period.

Several hon. Members: rose

Vernon Coaker: May I just say that, within reason, I will give way to every hon. Member who asks, but I have to take interventions one at a time?

Martin Salter: The Minister responded to the demands of the Metropolitan police force, but he will be aware that it has benefited over the past five years from being able to recruit for free more than 1,000 officers who were trained at the council tax payer's expense from forces in the counties surrounding London, including Thames Valley. When we will resolve this issue of the 5,000 wage differential between Metropolitan police officers and officers in the south-east in order to stop this unacceptable poaching?

Vernon Coaker: Along with a number of other hon. Members from across the House, my hon. Friend took part in the debate that specifically addressed Thames Valley police and related to how we try to deal with the south-east allowances. He has been one of the doughtiest campaigners in trying to get this issue resolved. As I told that meeting, I intend to do all that I can to encourage a settlement that prevents this sort of problem from occurring. He will know that it is a matter for the Police Negotiating Board to resolve. The issue is not one of resources, but one of agreement at the Police Negotiating Board so that the differential to which he refers can be examined and changed to try to stop some of the problems occurring.The hon. Gentleman will also know that that is a matter for discussion between the new commissioner and chief constables in neighbouring forces, to see whether they can come to an agreement about how to deal with the issue while they wait for the Police Negotiating Board to achieve a settlement.

Paul Truswell: West Yorkshire has benefited considerably from the additional police funding made available by this Government, but while tremendous strides have been made in improving the police funding formula inherited from the Conservatives, a gap remains between what West Yorkshire gets and what it would receive if it were fully funded under the formula. Can my hon. Friend give me a commitment that he will look seriously at how we can bridge that gap?

Vernon Coaker: My hon. Friend makes a reasonable point about his local force. From a national perspective, we have to try to ensure that the national funding formula is fair to all forces, and we have tried to distribute the pot of money available in a fair and reasonable way. That is why we have included a floor, so that no authority receives less than 2.5 per cent. If the formula were strictly interpreted, some forces would lose out. I know that because my local force in Nottinghamshire loses some money so that we can maintain the floor. However, that is necessary and proportionate from a national perspective.
	As I said to the hon. Member for Montgomeryshire (Lembit pik), the review of the funding formula needs to cover such issues. We need to see whether we can come up with a fairer mechanism, notwithstanding the fact that all hon. Members, rightly, fight for the best deal for their local force.

Mark Simmonds: The Minister will be aware, from meetings that he has had, of the genuine concern of the people of Lincolnshire about the perceived historic underfunding of the Lincolnshire police authority, which has been accepted, as evidenced by the one-off payments that the Home Office has made and the fact that the Government have allowed a 26 per cent. increase in the police precept in the area in the last year. Will the Minister ensure that the needs of rural counties such as Lincolnshire form a significant part of the funding review, so that they get their fair share of resources in the next comprehensive spending review?

Vernon Coaker: The hon. Gentleman makes a reasonable point about Lincolnshire. He will know that I visited the area recently and met the chief constable and others. Those are the issues that we will need to look at in the review of the funding formula, and he is right to point out that, as the hon. Member for Montgomeryshire said, we need a formula that is fair to both urban and rural areas. We need to find a way of ensuring that the needs of the vast expanses with very few people in them are properly reflected so that they receive the level of police funding that they can reasonably expect. We will look into that, and I am grateful to him for raising the point.

Paddy Tipping: My hon. Friend will know from his direct personal experience that crime is falling in Nottinghamshire and police resources are at a record level. It is an improving police force, but may I reinforce the pointI know that he is well aware of itthat Nottinghamshire, Lincolnshire and other east midlands authorities are disadvantaged in relative terms by the funding formula? Can we make progress quickly? The Nottinghamshire police are making progress: they would be helped by changes in the funding formula.

Vernon Coaker: I thank my hon. Friend and neighbour for those comments. I know that he and other colleagues in Nottinghamshire, Leicestershire and across the east midlands have campaigned long and hard for a fairer distribution of resources to forces in the area. It is a fact that the floor means that some forces do not receive the amount that they would if the funding formula were fully implemented. I have to say that of course the opposite is true: some forces would lose significant amounts of money were we to remove the floor. We are searching for a way to ensure that police forces in Nottinghamshire, Lincolnshire and the rest of the east midlands are funded as fairly as possible. I am not sure whether Ministers are supposed to do such things, but as a fellow Nottingham MP I join my hon. Friend in congratulating Nottinghamshire policeand other police forceson the work that they are doing in reducing crime.

Annette Brooke: Dorset police authority is a high-performing and efficient force, but it predicts that it will have to lose 43 police officers this year, even with the floor, which is very important to it. The authority is especially concerned about how bars are dealt with in the formula. Dorset has a high concentration of licensed premises, with up to 1,000 places, in just two major towns, with the rest of the county being relatively rural. The formula does not really provide enough funding to police those hotspots adequately, because it is based on an area average that does not work satisfactorily in Dorset's case.

Vernon Coaker: I am grateful to the hon. Lady for her comments. In this debate, I have tried to avoid sayingapart from in my opening remarksthat police numbers have gone up and crime has gone down, because although that is true in Dorset, as there are more officers, community support officers and staff, and crime has fallen, it is also true of every constituency. Notwithstanding that, there are issues with how the funding formula works. I have tried hard, together with the Home Secretary and colleagues from the Department for Communities and Local Government, to ensure that this financial settlement provides stability in difficult times. The vast majority of responseswe had far fewer this yearasked us to ensure that we implement the funding amounts that we said would be introduced in 2009-10 to provide that stability. After 2010-11, we will enter the new comprehensive spending review period, and that is when we can try to address some of the concerns about the funding formula.
	The hon. Lady has raised some of the issues with the formula, and other hon. Members have raised others. My right hon. Friend the Member for Leicester, East (Keith Vaz) raised issues that affect Leicestershire and the east midlands. All those matters require discussion and review, and we have to try to find a way forward. People come at the issue from the point of view of their arearightly, because they represent that area. But as the Minister, I have to see the issue from a national perspective. We are trying to be fair to police forces in every area, and the fairest way to achieve that is to provide the stability that is achieved in this settlement.

Simon Hughes: The Minister makes a fair point about the need for balance in the national allocation. He knows that part of the allocation is based on the number of people coming into an area, and part of it on the number of residents. Can he assure us that the Department will take into account the underscoring of the population in areas where the Office for National Statistics figures for resident population are significantly behind the real numbers? London is an obvious case. There are far more migrants coming to London than the figures for the resident population suggest.

Vernon Coaker: Population is one of the factors that are taken into account, and the exact measurement of population is an area of controversy, and something that needs to be taken into account.  [Interruption.] I am reminded that I gave way to the hon. Gentleman earlier, so he has had two bites at the cherry.
	Migrant numbers do have an impact on costs, and that is why the Government have set up a fund, available from April 2009, to help local services with those costs, such as translators. That money will be made available to Government offices, including the Government office for London.
	Growing numbers of specialist police staff are taking on roles as scene of crime officers, fingerprint analysts and intelligence officers. Additional police staff are also increasingly taking on the routine elements of case file preparation, prisoner supervision and station inquiries, freeing police officers from administrative work. Although overall numbers are important, it is crucial to make the best use of officer and staff time so that those people are in the right place at the right time to deliver for the public. Getting the best possible work force mix of officers and staff will also help to ensure that the most responsive possible service is provided.
	Operational police officers are spending more of their time on front-line duties. Overall crime is falling or stable. The overall level of crime recorded by the police in July to September 2008 fell by 3 per cent. compared with the same quarter in 2007. Within that overall figure, violence against the person fell by 6 per cent. and firearm offences fell by 29 per cent. The British crime survey figures published on 22 January 2009 show that, according to interviews, in the year to September 2008 the overall level of crime is stable compared with that in the previous year. So is the risk of being a victim, which remains at a historically low level.
	Levels of violent crime, domestic burglary and vandalism were also stable compared with the previous year, and vehicle-related thefts fell by 10 per cent. In the 12 months to September 2008, there was a statistically significant decrease in the proportion of adults with a high level of worry about violent crime.
	May I place on record my thanks to the police service of this country, which has responded well to the many and various demands placed on it? New challenges continue to arrive and we must ensure that the service is in the best possible shape to meet them. That includes not just funding but getting the best possible service from the police.
	The policing Green Paper From the neighbourhood to the national represented a radical new deal for the service, freeing it up to focus on tackling local issues in each neighbourhood and to respond to the challenges of serious organised crime and terrorism. We announced that we would scrap all top-down targets for forces, with the exception of onelocal confidence. We have done that.
	The Green Paper declared that we would create a new model of police accountability, with a stronger role for police authorities and Her Majesty's inspectorate of constabulary. We are doing that. It highlighted the work that we are doing, not least through Operation Quest, to maximise the efficiency and productivity of the service. It said that we would invest in the police leaders of tomorrow, which we are doing through a new senior appointments process and a national police leadership college. All that combined means that the service can be more flexible in meeting the challenges of 21st-century policing.
	We remain absolutely committed to neighbourhood policing as the bedrock of local policing in the 21st century. We are building a more responsive, locally accountable and citizen-focused police service through a programme to transform policing at a local level to meet the needs of the communities. The current phase of work is to ensure that neighbourhood policing is embedded into core policing activity and that teams increase their focus on working with local communities to identify and tackle local problems together while continuing to provide high-visibility policing, and reducing antisocial behaviour and the fear of crime.
	HMIC has today published Get SmartPlanning to Protect, which is its report, commissioned by the Government last year, on the planning that forces undertake to deliver protective services. These are particularly significant areas of policing, such as major and organised crime, critical incidents, and domestic and child abuse. HMIC has identified variations across forces in the quality of service planning, and I am committed to seeing improvement made. The National Policing Improvement Agency is working to deliver a comprehensive programme to help develop and support forces in their protective service planning. Police authorities will also be inspected for the first time in 2009 and we will ensure that necessary improvements are made in this area. Legislation is in hand to strengthen collaboration and to ensure that it continues to be a key means of improving protective services.
	Total Government revenue spending for police authorities in 2009-10 will be 9,482 millionan overall increase of 2.8 per cent. on 2008-09. Of that general provision, 8,281 million is for police general grants, which will increase by 2.7 per cent. In addition, 1,201 million is for specific grant funding, which I shall come back to later. We have kept ring-fenced funding to a minimum to allow maximum local discretion over how to allocate and spend resources.
	The police grant report for 2009-10 deals with Home Office general police grants for revenue expenditure. The amounts payable to individual police authorities are listed in the report that I have presented to the House. Additionally, police authorities in England and Wales receive revenue support grants from local authorities. Overall, general grant allocations to police authorities were set out in my written ministerial statement of 21 January. Within the general grant provision for 2009-10, we have set a funding floor of 2.5 per cent. That means that each police authority in England and Wales is guaranteed an increase of at least that level.
	We have provided a settlement that encompasses more than a degree of stability for all police authorities while at the same time acknowledging that there are areas with greater relative needs. There will be increases of up to 3.9 per cent. in the west midlands. There will always be a dispute over how far the needs-based funding formula should be allowed to prevail over the stability provided by the grant floor. My right hon. Friend the Home Secretary and I have tried to strike a sensible balance in the settlement and will continue to do so in the future.
	There has been no change to the rule 2 grants, which were mentioned by the hon. Member for Montgomeryshire. They are former specific grants, now allocated with the general grants, that total 208 million. Police authorities have complete flexibility on how best to use that resource. Before the comprehensive spending review, we consulted on whether to put the funding back into the formula funding pot, but that could have had a major impact on grant distribution and we decided, on balance, to retain the status quo. That move was widely welcomed by many police authorities, particularly smaller ones that had come to rely on rule 2 funds, such as the rural police fund, as core funding. The position and implications will be reviewed in full before we make any further changes to the special formula grant.
	Let me turn to some more specific elements within the funding settlement for 2009-10. We have retained the crime fighting fund in its present form. That fund of 277 million played an important part in supporting growth in police capacity between 2000 and 2004. However, since its introduction the story has moved on, with the employment of more police staff to replace officers in roles where constable powers are not needed and the engagement of police community support officers, who play an important role alongside police officers. The strictures imposed by the CFF's system of financial penalties had, by 2006, limited the flexibility of forces to engage the right people with the right skills in the right jobs. The Government therefore suspended the CFF criteria in December 2006, allowing local chief officers and chairs to develop the optimum work force mix without losing funding. The move ensured that decisions on the mix of police staff and officers lay where they should, with the chief constable. That was welcomed by the Association of Police Authorities and the Association of Chief Police Officers.
	There is clear evidence that a good number of forces are using their CFF freedom to release police officers for the front line, replacing police officers in back-office functions with police staff when there is a clear business case that it is right to do so. In some forces, officer numbers are fewer than they were in March 2008, but the essential point is that the replacement of police officers in back-office functions has not had a negative impact on front-line capacity. In a good number of cases, it has increased front-line capacity. The most recent figures show that some forces have increased police officer numbers while others have decreased them.
	From 2002 until March 2008, we invested more than 700 million in introducing PCSOs and neighbourhood policing. Home Office funding for neighbourhood policing, including PCSOs, in 2008-09 is 324 million, an increase of 2.7 per cent. For 2009-10, funding has increased by a further 2.7 per cent. for each force to a total of 332 million. A further uplift of 2.7 per cent. is planned for 2010-11.
	The basic command unit fund was introduced in 2003-04 for a two-year period that has subsequently been extended. The BCU fund will be 40 million in 2009-10, the same level as in 2008-09.
	For several years, the Home Secretary has provided additional funding to ensure that Welsh police authorities receive at least a minimum increase in grant in line with English authorities. For 2009-10, we have again adjusted the Home Office police grant for Welsh police authorities to maintain consistency with England. That additional support will total 15.5 million next year.
	We have received 15 representations on the funding settlement from 14 police authority areas. That is considerably fewer than in previous years, and most of the representations have to do with the future. For next year, we have again maximised the increase in general grant and ensured that all police authorities have received a guaranteed minimum increase in grant of 2.5 per cent. The delivery of efficiency and productivity gains, as well as prudent budgeting and making full use of available funding flexibilities, means that there is no reason for excessive increases in the police precepts on council tax. The Government expect an average council tax increase in England of below 5 per cent. Council tax in Wales is a matter for the Welsh Assembly Government. We also expect the relentless focus on value for money, which is now more necessary than ever, to continue.
	Capital grant and supported capital expenditure totalling 222 million will be allocated in 2009-10, with each police authority receiving the same allocation as in 2008-09. We have also announced additional sums of money for mobile information devices and we have identified additional resources to tackle gun and knife crime. That is something that we will do, as necessary, as we move forward.
	We have continued to listen carefully to all stakeholders in determining the detail of this police funding settlement. It gives police authorities the stability that they all need to plan ahead, and it will support the police service in delivering effectively for the public. I commend the report to the House.

David Ruffley: I thank the Minister for his comprehensive speech. I want to begin my remarks on behalf of Her Majesty's Opposition by expressing the sentiment that the police in this country do a very difficult and often very dangerous job on our behalf, and I pay tribute to their service. The police need resources from the Government, and indeed the taxpayer, to discharge their duties in upholding law and order. That is why this debate is so important to us all.
	Last year's crime figures showed that violent crime has risen by almost 80 per cent. in the past decade. Crime has not increased in every category in that period, but violent crime certainly has and that causes great concern to the public. In addition, the economic downturn has placed even greater strain on already tight police budgets. Sadly, the analysis from the Home Office that predicted a rise in crime as the economy worsened has been borne out by the latest quarterly crime figures. In the last year, burglaries have risen by 4 per cent., while fraud and forgery are up by about 16 per cent. and the number of street robberies committed at knife-point have increased by 18 per cent.
	This year's settlement is the second part of the three-year 2007 comprehensive spending review. Excluding additional grants for counter-terrorism and other specific grants, the police settlement increase will be 2.7 per cent. this year, as the Minister said. A total of 20 police authorities will receive the lowest increase, of 2.5 per cent., and the Minister mentioned that there was a bigger-than-average increase for the West Midlands authority.
	There is no doubt that the police grant settlement is extremely tight, as the Minister would be the first to accept. Last year, the Association of Police Authorities said that the three-year settlement was one of the tightest for many years. In its submission to the 2007 CSR, the joint APA and ACPO expenditure forecasting group said that there would be a funding gap, even with an annual grant increase of 2.7 per cent. The group's most optimistic assumptions suggested a funding gap that by 2010-11 would be in the region of 660 million. Using less optimistic assumptions, the group calculated that the gap could be as high as 996 million.
	The economic downturn has had an adverse impact on the financial position of police authorities. The collapse of Icelandic banks has wiped out about 95 million of police authority reserves, according to information that I have received from the APA. Lower interest rates of course mean that there is less investment income for police authorities, and proceeds from asset sales are lower in a depressed market. The Gloucestershire police authority, for example, estimated in January that the current grant settlement and economic conditions mean that it could lose up to around 60 police officers and 28 PCSOs, as well as 50 police staff posts.
	The estimates used by the expenditure forecasting group assume that the police precept on council tax would increase up to that maximum of 5 per cent., but the Minister for Local Government announced in a statement on 28 November that seven police authorities, including Cheshire, Leicestershire and Warwickshire, would face precept increase caps of 3 per cent. in 2009-10. In his reply, I hope that the Minister will confirm that those authorities will receive less than the 5 per cent. precept cap.
	Of course, Her Majesty's Opposition oppose excessive increases in council tax, especially in these dire economic times. The Minister will be very well aware that some police forces with historically low police precepts believe that they have no alternative but to seek more revenue from local council tax payers. Does the Minister think that in some police force areas there is a public demandnot a councillor demandfor an increase in locally funded police spending above the cap limit? Has he received any representations from members of the public along those lines?
	In last year's debate, the Minister's predecessor said that he expected the 2.7 per cent. growth in the police force grant to apply to this year as well, and the Minister has confirmed that today. However, I should like to hear his views on the pre-Budget report statement of 24 November, when the Chancellor announced
	that the Government will now find an additional 5 billion of efficiencies in 2010-11[ Official Report, 24 November 2008; Vol. 483, c. 489.]
	On a point of clarification, will the Chancellor's demand for extra efficiency affect the 2.7 per cent. increase? I have seen minutes from Lincolnshire police authority and the Met that express the concern that they might be expected to find extra efficiency savings at short notice. Will the Minister clarify the position in relation to that efficiency target? The 2007 CSR set a target for police authorities to make 9.3 per cent. efficiency savings over three years, so will the Minister say whether police authorities are still expected to meet that target? Alternatively, is there a new targetexplicit or otherwisethat he wants them to work to, as a result of the catastrophic downturn in the economy and in the fortunes of the Government finances since the CSR statement for the three-year period that we are currently in was made?
	I should also like to hear the Minister's views on some other statements by the Chancellor, who recently announced plans to bring forward 3 billion of capital spending to assist the economic recovery. How much of that accelerated capital expenditure has been channelled into the policing sector, in its widest definition? Many people in the police authorities believe that accelerated local investment could assist improvement in the police estate and also support the local construction industry.
	I turn now to some of the minutiae of how the police grant is distributed. The calculation is notoriously complex, and is based on five separate components. The first, the needs-based formula, is easily the most important and is otherwise known in the trade as the principal formula. Its main determinant is the projected resident population, which is then adjusted to take into account several police crime top-ups that adjust the main principal formula to take into account socioeconomic and demographic factors that may impact on crime levels. Those factors include how many licensed bars, people in long-term unemployment, daytime residents or residents in terraced accommodation there are in an area, as well as its population sparsity.
	Secondly, in coming to a grant settlement, the Home Office will also apply additional rule 1. I will not detain the House on the minute working of that rule, important though it is. It affects the grant provision for South Wales police and redistributes it to other police authorities in Wales.
	Thirdly, the Home Secretary will apply additional rule 2. In the past, the Home Secretary distributed specific grants such as the rural policing grant, the forensic grant and the initial police learning and development programme grant. Ministers decided to amalgamate those grants, so that police authorities would have more control over how a number of those funds were used; that was sensible. The distribution of those amalgamated moneys under the additional rule is determined by the principal formula. Fourthly, the Home Office will distribute specific grants. I will not repeat what the Minister said, but there is, of course, a separate pot for counter-terrorism. He also referred to the crime fighting fund and the ring-fencing of funds for neighbourhood policing, all of which we support.
	Finally, the police grant floors are applied. The introduction of the principal formula in 1995 was designed to reflect the resource needs of police forces. However, to ensure that the introduction of the formula did not leave forces facing widespread financial instability, floors have been introduced. They guarantee that each police force receives a minimum percentage increase in the police budget, and we heard something about that from the Minister. Notwithstanding his statement, there remains serious concern among police authorities and police forces, in all parts of the country, about how the police grant formula is calculated; the Minister understands that concern because he is a well-informed and listening Minister.
	The floors mean that forces cannot receive an increase below 2.5 per cent., even if the principal formula has determined that they do not require such a level of funding. Equally, a police force that should, according to the formula, receive a higher amount will have its grant scaled downwards. As the Flanagan report illustrated, using 2007-08 figures, that meant, at the extreme ends, that the West Midlands force had its grant scaled down by 11 per cent., or 48 million in nominal terms. Bedfordshire received 6 per cent., and Thames Valley police 4 per cent.less than they would have done if the formula was applied in its raw form. The funds that are taken away from one force are given to another, and that has meant that some forces, such as Northumbria, have received over 12 per cent. more.
	Her Majesty's Opposition welcome the removal of the ceiling, which the Minister's predecessor, the right hon. Member for Harrow, East (Mr. McNulty), announced last year when he was Minister for Security, Counter-Terrorism, Crime and Policing. However, I think that all of usthis might even extend to the Minister, judging from his commentsremain less than clear about the future for grant floors. It is worth reminding ourselves of what Sir Ronnie Flanagan's report on the future of policing said of grant floors:
	If we are to get the best performance return for our investment over the lean times ahead
	how prescient Sir Ronnie was; he said that in February 2008, before the credit crunch
	we must start to deal with these anomalies.
	He was referring to the floors. He went on to propose the following:
	I think it prudent that, from that point on, there should be a staged relaxation of the 'floors and ceilings' factors which dampen changes in allocations, possibly combined with special consideration for those few Forces which would face the most significant reductions in funding
	as a result of that relaxation.
	The Home Affairs Committee supported Sir Ronnie's proposal. It produced an excellent report, Policing in the 21st Century, and I see that the Chairman of the Committee, the right hon. Member for Leicester, East (Keith Vaz), is present. The report was thoughtful, and it avoided party politicking and cheap points. Neither he nor I indulge in that kind of business when we are talking about the serious matter of policing the United Kingdom. The report said:
	We support Sir Ronnie Flanagan's recommendation for full application of the police funding formula at the next Spending Review.
	Can the Minister confirm that the Home Office will implement that proposal, and will he give us his detailed thoughts on it? The Select Committee and Sir Ronniean independent adviser to the Home Secretarythink that it is a good idea. Where are we on that?
	In November, in a written ministerial statement relating to the settlement that we are considering, the Home Office said:
	Our promised review of the funding formula before the next CSR is already under way with active collaboration from the police community.[ Official Report, House of Lords, 26 November 2008; Vol. 705, c. 163WS.]
	That is reassuring, but the House would be grateful for a bit more specificity on how far that review has gone. Will the Minister show a bit of ankleto use a colloquialismand share a bit more detail on how far he has got with that review? Will he say when we might expect an interim announcement on where the Government have got to? Again, this is not a matter of party politics; all of us with a concern about policing need to hear the Minister say more about the future for the formula on the record.
	With your permission, Mr. Speaker, I would like to say something about population figures, because I think that that is an area of technical inadequacy with which all Members on both sides of the House have problems. On 27 November 2007, the then Minister for Borders and Immigration, the right hon. Member for Birmingham, Hodge Hill (Mr. Byrne), told the Home Affairs Committee that the funding formula used to allocate money to the police for 2008 to 2010 would draw on 2004 national population projections
	simply because that is the best available data.
	Population projection figures form an integral part of the policing formula, as we all know, so is it really acceptable that the budget that we are debating is distributed according to a formula that is fed with data from 2004? I know that the Minister cannot wave a magic wand and get a sub-national version of a census for certain areas, or even a national census before the due date, but he might want to share some of the thinking about the inadequacy of the data, to which his former Home Office colleague, by implication, 'fessed up and drew our attention.

Fiona Mactaggart: The hon. Gentleman raises an issue that he knows affects my constituency significantly. The inter-census estimation of the population of Slough underestimates its population substantially. As a result, we, a multiracial community, are under-policed. Although the Minister has confirmed again that the money is in the budget, the situation is made worse by the fact that the south-east allowance is not being uprated because it is stuck in the Police Negotiating Board. Perhaps the Minister could, in his summing up, reassure places such as Slough that he will take into account all those issues to make sure that those places, which face real policing challenges, have enough money to deal with those challenges.

David Ruffley: I am grateful to the hon. Lady. I have heard her talk in many forums, not least fairly recently on Radio 4, about her constituency and the problems that she outlines. She is a doughty and persistent debater on that point, drawing to the attention of Ministers what needs to be done for her constituencyand there are others in the same position.
	The second point that the hon. Lady raises is also tremendously important. I pay tribute to the Minister, because this time last week, in a debate held in Westminster Hall on the Thames Valley police force area, he said something interesting in response to a question from the hon. Member for Reading, West (Martin Salter). It was along the lineswe have new information from the Ministerthat the PNB could be talked to by the Minister. I paraphrase his words. He undertook to have a word about what the PNB was doing in relation to the south-east allowance. Like the hon. Lady, I wonder whether the Minister could give us an update on any discussions that he or his officials have had since last Wednesday in relation to the PNB and the south-east allowance. That is hugely important for all Members in that region. I am grateful to the hon. Lady for reminding me of that point, so that I can remind the Minister of what he said last Wednesday.
	According to ACPO, police forces in Kent, Lincolnshire and Cambridgeshire have suffered particularly from underfunding. By particularly I mean that they have gone out of their way to send briefing to me on these issues, which other police force areas also face. The problem that they have is the gap between predicted and real population figures. Their concerns were drawn together in a presentation given by Chief Constable Grahame Maxwell to the Home Office migration impacts forum on 16 July 2008. There was also a report in  The Sunday Times on 27 January last year, in which Kent police observed that the total additional cost caused by immigration at that time stood at 34 million over the three years to that date.
	The extra costs of immigration have not been fully recognised in the funding settlement. The chief constable of Cambridgeshire famously gave oral evidence to the Home Affairs Committee. It strikes me that that Committee teases out some interesting evidence and findings, which provide those who scrutinise Ministers with a great deal of ammunition. Chief Constable Spence said:
	We have had only a 0.3 per cent. increase in the way the formula operated this year
	in 2007, when she gave evidence. She went on:
	There is nothing within government to be able to respond to the rapid changes that have happened. That was where the problems arose. The funding formulas are not rapid and flexible enough to deal with change.
	Even the former Minister for Security, Counter-Terrorism, Crime and Policing, the right hon. Member for Harrow, East (Mr. McNulty) said in oral evidence to the Home Affairs Committee at the end of 2007 that
	the Government collectively is very slow in responding to large growths of population over a particular short period of time.
	That was refreshing candour from the Minister's predecessor, but we need to hear from the Minister today what has been done. That statement was made at the end of 2007, and there is something on the record about technical changes. We need to know whether it is just down to the Home Office, or to the Home Office together with other Departments, to get this sorted.
	The costs to police forces caused by migration, and the translation costs flowing from that, are an extra specific cost of policing. Under a freedom of information request that I issued to forces in United Kingdom, among the 44 forces that responded, there had been a 63 per cent. increase in the cost to those forces of providing interpretation and translation services. In Kent, there had been a 30 per cent. increase, from about 320,000 in 2003-04 to more than 422,000 in 2007-08. In Thames Valley, there has been a whacking 127 per cent. increase in that period. In my constituency in Suffolk, there has been an 86 per cent. increase in translation and interpretation costs in that periodfrom 113,000 to 210,000.
	A report by KPMG in 2007 concluded that Cambridgeshire required an additional 100 police officers to cover the additional work load generated by policing foreign nationalsthat was their definition, not ours. The report, The changing demography of Cambridgeshire, September 2007, is published by Cambridgeshire constabulary. The methodology behind the funding formula will mean that an additional work load is not being taken into account when these grant moneys are calculated.
	On 11 June 2008, the Department for Communities and Local Government published a cross-departmental migration impacts plan that sets up a transitional impacts migration fund from 2009-10. Although the report acknowledged the cost to policing, it was not clear to me whether police authorities could apply for money from the new fund to mitigate the cost of immigration. That was until I heard the Minister's remarks earlier in today's debate. For the sake of clarity, can he explain how police authorities can apply for that money? Is there any limit on the amount they can apply for? When can they apply for it? What criteria need to be met? Above all, we need a clear statement of what the review status of the funding formula will be before the next comprehensive spending review starts its progress inside government. Will a new, more dynamic projected population methodology be utilisedyes, no or maybe?
	The Flanagan report said:
	The ability of the Funding Formula to predict aspects of complex protective services, such as serious and organised crime, needs to be considered more closely and I would urge the Funding Formula Working Group to review this further.
	That is my real concern, as that is not always flagged up in debates such as this. We have heard about neighbourhood policing, which is hugely important for level 1, but let us not forget level 2 and level 3 resourcing, as Sir Ronnie Flanagan urges.
	The Bill that the Minister and I are spending many enjoyable mornings and afternoons this month debating in Committee Room 11 refers to mandation powers relating to collaboration arrangements between forces in England and Wales. Part of the debate tomorrow relates to the level 2 gap in protective services, which is acknowledged by the Government, Her Majesty's inspectorate of constabulary, the Opposition and everyone else, but it is not clear to me how the funding formula and the statement from the Minister take account of the resource implications that specific forces mention when they are trying to improve their policy and operational response to serious and organised crime across county and national borders.
	In his final report, Sir Ronnie stated in paragraph 2.61 that
	the Funding Formula will need to ensure that the capacity to deal effectively with protective services in terms of deterrence, intelligence-gathering and specialist, proactive capability is built into funding arrangements.
	Will the Minister comment on that? Will his funding review, not just the statement in the House today, say something on Sir Ronnie's point about protective services?
	I know that other hon. Members wish to make a contribution, so I shall draw my remarks to a conclusion. There is the added cost of dealing with alcohol-related crime. My hon. Friend the Member for Hornchurch (James Brokenshire) on the Front Bench has done much valuable work in drawing attention to the huge policing cost of alcohol-related crime, as has the Chairman of the Home Affairs Committee, in the report to which I referred earlier.
	The most recent British crime survey, from July last year, stated that 45 per cent. of all victims of violence described their assailant as being under the influence of alcohol at the time. There is a wealth of evidence from chief constables as well. Chief Constable Stephen Otter of Cornwall and Devon Constabulary, said that since 2004-05 there has been a
	fairly significant increase in the proportion of violent crime where we can be absolutely sure there is an alcohol-related aspect.
	Indeed, a Cabinet Office review as far back as 2003 said that, on average, it costs 59 more to process an arrestee who has committed an alcohol-related offence than a comparable arrestee whose offence is not alcohol-related. I am sure that the figure is a lot higher if the figures that we have all seen on the costs of bureaucracy and process are anything to go by.
	There is a problem with the 24-hour licensing laws. Is the Minister considering Her Majesty's Opposition's innovative, radical and much-needed call for discretion to be given to local authorities in new legislation so that they can decide how the 24-hour licensing rules are applied in their areas? The policing formula does not take into account the extra cost of officers trained by forces around London who move to work in the Met; that was the subject of our debate last week, and we have heard about the allowance for the south-east.
	In conclusion, in its own right the grant settlement is tight, and we understand why. Given the additional pressures from the economic collapse that this country is experiencing, police authorities face and will face severe financial pressures if they just maintain the current levels of service to local people. We have to make sure that the current structure for distributing the police grant is robust and fair. As I hope I have made clear, there are serious concerns about how the funding formula operates. The review of the police funding arrangements in advance of the next comprehensive spending review provides an excellent opportunity to address the deficiencies, to which I and other hon. Members have drawn attention, in the current distribution process. I look forward to the Minister's response to our challenge to himthat is, to explain his current thinking.

Keith Vaz: It is a great pleasure to follow the hon. Member for Bury St. Edmunds (Mr. Ruffley), who is shadow police Minister. I probably agreed with almost everything that he said. Either I am on the wrong side of the House or he is; I cannot decide who is in the right place. On behalf of members of the Select Committee on Home Affairs who are not here, I thank him for his kind words about the Committee's report, Policing in the 21st Century.
	I have had conversations with the hon. Gentleman about the report; he told me that he had read it with great interest. I know that the Minister has as well, and we look forward to the Government's response and to the Minister's appearance before us to answer questions about it. There is absolutely no point in such kind words being said about the report, and its being generally well received by the Government and the Opposition, if our recommendations are not implemented. We look forward to that process happening.
	I repeat what I said in my brief intervention on the Minister. He knows that I am a great fan of his. Since he has taken on his portfolio, he has been very willing to discuss policing issues with all Members of the House, especially members of the Select Committee. The way in which the Government dealt with the whole process is a good model for the future. If I can be partisan for a moment, I should say that when the Minister announced that Leicestershire was going to be capped, there was great worry among Members from all parties from the city and county, who had been concerned about the possibility of the cap. The Minister for Local Government, who was here at the beginning of the debate, had meetings with those Members and the present Minister for Employment and Welfare Reform, the police Minister's predecessor. The Minister for Local Government listened to our points about the special case of Leicestershire, and I am pleased to say that he accepted that case. Far too often, Governments make decisions and say that they want to consult but do not do so; this Government and these Ministers, however, have shown that they are prepared to consult and listen.
	Leicestershire is aware that, in a sense, the party is over. There are no unlimited funds available for policing. I shall not repeat the statistics mentioned by the Minister and the hon. Member for Bury St. Edmunds, but there has been a large increase in the police force budget in the past 10 years. There have been more police officers on the beat and more police community support officersa role that we invented. The increase has been extremely important and positive. The overall allocation this year is 8 billion-plus and a few hundred thousand here and there, which is a huge amount of money. In Leicestershire, we welcome the 2.8 per cent. increase that we are to have, because that will allow us to continue the services that we provide.
	I wish to make only three points during my brief contribution. Originally, I thought that this debate would last an hour and a halfhence my glares at both Minister and shadow Minister. I then realised that there were another two hours to go. Madam Deputy Speaker, you will be pleased to hear that I am not going to speak for that whole period, because other Members wish to participate and I am sure that there will be a wind-up from the Minister.
	My first point is about alcohol-related crime, which the hon. Member for Bury St. Edmunds mentioned. I make no apology for repeating this point every time we have a debate on policing. The hon. Gentleman gave the figure: 45 per cent. of victims of violent crime have said that the perpetrator's behaviour was either influenced by or had connections to the drinking of alcohol. If we talk to any police officer of any rank about what happens in town centres, especially on Friday and Saturday evenings, not only in big cities but in small towns, we will hear about the results of alcohol-related crime. Why on earth should we allow a situation to continue in which we know the cause of the crime and what is happening, and all we do is spend more and more taxpayers' money on trying to address an issue that the Government can deal with?
	I know that there have been a number of Government initiatives, and I welcome what the Home Secretary has said on many occasions about alcohol-related crime. However, the Government should go that little step further and try to do something more about the supermarkets. Why do I say that? The fact is that there is ample evidence to suggest that supermarkets are underselling. Pubs and clubs sell alcohol at a higher price. At this point, I am normally interrupted by my hon. Friend the Member for Selby (Mr. Grogan), who is chairman of the all-party beer group. He is not here, however, perhaps because it is lunch time and his group is meetingI do not know. I am casting aspersions on him, and I did not tell him that I would mention him. Anyway, he jumps up and defends the pubs.
	I want to ask what we are going to do about the very low prices for alcohol in supermarkets. That is a big problem. In its report, the Select Committee made specific reference to floor pricing, and we asked the Government to consider the issue. That may have been a recommendation; the hon. Member for Newark (Patrick Mercer) has popped in and may remember precisely what we said. Nevertheless, we felt that floor pricing was the only way to stop people, especially young people, from going into supermarkets and getting tanked up on very cheap alcohol bought under the promotions that every single supermarket in the country is running at this very moment. If anyone leaves the Chamber now and goes to any supermarket anywhere in the vicinity of Westminster, they will see those promotions. Unless we deal with that issue, it will continue to be a major problem for this country.

Patrick Mercer: I am grateful to the Chairman of the Home Affairs Committee. As he will remember, the supermarket spokesmen who gave evidence to the Committee were defensive on that point. The right hon. Gentleman and I both said that the undercutting and the loss-leading sale of alcohol were extremely injuriousparticularly to young folk, including those in Leicester, East and Newark. Will he find out from the Minister exactly what has been done about the issue?

Keith Vaz: I thank the hon. Gentleman for that intervention. I am sure that the Minister will have taken note and will respond. As yet, we have not received a full response from the Government on this issue; we hope that it will come shortly.
	We hope that urgent action can be taken on this problem, as it can be solved. It will have an impact on the Minister's budget. We have great sympathy with him; we know that he does not simply get up in the morning and think of a figure that he is going to allocate to local police authorities all over the country. We know that he has to bargain and negotiate with the Treasury. How better to do that than with an array of statistics and initiatives that show that the Home Office is seeking to bring down the cost of policing?
	My second point is about police pay. I am pleased with how the Government have handled this issue over the past few months. I never again want to be part of a demonstration where thousands of police officers, who do not have the right to strike, are forced to demonstrate against a Government who have worked with them in such close partnership over so many years. That was a terrible situation. I am glad that over the past few months the Home Office has begun proper and appropriate negotiations with the police and has given them not only a pay settlement that they deserve but the framework for dealing with these issues in future.
	On Saturday, I was present at a march with the hon. Member for North Southwark and Bermondsey (Simon Hughes), when 100,000 British citizens marched through the centre of London. Police officers were there, although there were not a huge number. There was a moment during that demonstration when things nearly went wrong, when several young people, who are very passionate about the situation in Sri Lanka, decided to sit down on Westminster bridge and not move. The way in which the police handled that very difficult situation was absolutely superb. They persuaded the young people to get off the bridge and allow it to be reopened. That takes quality policing. In order to get quality policing, we have to pay police officers the amount of money that is appropriate to their skills. Please let us continue in that vein in future. Let us negotiate, so that we never reach a situation where they have to start demonstrating on the streets of London.
	My final point concerns new technology. I hope that the Minister will tell us a little about the legal action that the Home Office has instituted against the company that provided the so-called police portal, which, of course, does not work. We all want the computerisation of the police to happen. We would love to see a situation whereby the police in Leicestershire and Nottinghamshire and the Metropolitan police were able to access one set of information through one police portal. I think that that was the intention of the National Police Improvement Agency, but it just did not happen. We have probably wasted a huge amount of money on this issue. I hope that the Minister will tell us what is happening, because it is important that we spend our money wisely, especially in the current economic climate.
	Our report mentioned several examples of where Government investment in new technology would make a huge difference not only to the overall cost of policing in future but, more importantly, to the efficiency of local police officers. That means investment in hand-held computers. At the moment, there are 20,000 such devices in the country, and the Government have committed 75 million for another 30,000. However, the Committee says that there is no reason why every single police officer in the country should not have a hand-held device. The time savings are huge. When Bedfordshire police authority bought these devices for its police officers, the amount of time that they spent outside the police station increased, and the time that they spent filling in forms and doing paperwork decreased. The amount of time that they spent processing cases increased as well. BlackBerry has told usI am not suggesting for one moment that we should go out and buy BlackBerry just because it has given us this informationthat its research, which it presented to the Committee during our inquiry, suggests that if every police officer had a BlackBerry, it would give them an extra full hour of time outside the police station.
	A lot has been said about the report by Sir Ronnie Flanagan, which is excellent; that is why the Committee adopted most of its recommendations. He talks about new technology and saving time by cutting red tape. Of course, Ministers always tell us that there is going to be a bonfire of red tape. Jan Berry has been appointed as the cutting of red tape tsarwhatever her title is; bureaucracy tsar, perhaps. The Committee looks forward to examining her in the near future. The fact is that we need real progress on cutting bureaucracy. That is evident if one goes to any police station in the country and talks to any custody sergeant, as I did when the hon. Member for Newark invited me to visit Newark police station. I pay tribute to all the police officers there. Unfortunately, there was a minor mishap when I thought that a fridge was the place where they kept their lunch, but it was in fact the fridge for DNA samples. Even Back-Bench MPs make gaffes, not just Ministers and Mayors of London. We pay tribute to all that police officers have done and say to them, We want to increase your time outside the police station doing policing work.
	I urge the Minister to take the plunge and invest in new technology. When the Government make that decision, please could we have central procurement, so that Lincolnshire police buy the same equipment as the police in Staffordshire, and the police in Staffordshire buy the same equipment as the police in Bristol or London? That would mean that we would not have problems about whether people are speaking to each other properly and appropriately, and passing on information. In many high-profile cases, especially concerning children, people talk about sharing information after the event inquiries have taken place.

Patrick Mercer: rose

David Davis: On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker: Order. Mr. Davis, I think that the right hon. Member for Leicester, East (Keith Vaz) was giving way. I call Patrick Mercer.

Patrick Mercer: Thank you, Madam Deputy Speaker. I am most grateful to both right hon. Gentlemen.
	The right hon. Member for Leicester, East (Keith Vaz) makes an astute point. Is there not now clearly a case for a central procurement agency not only for police forces, but for security elements inside the policing apparatus? If we can do it for defence, surely we can do it for security and policing.

Keith Vaz: The hon. Gentleman is this House's expert on these matters, so I am not going to challenge his judgment in any way. He is absolutely right. There is a need to look at those processes to see whether we can create what he alluded to.
	In conclusionto allow the right hon. Member for Haltemprice and Howden (David Davis) to raise his point of orderI thank the Minister for his allocation so far. We know that things are going to be tough. We may not be thanking him next year, especially in Leicestershire if a cap is put on us, but there are ways in which we can cut costs and invest in the future. Please let us do this and make better what we know we already havea really world-class police service.

David Davis: On a point of order, Madam Deputy Speaker. I apologise for interrupting the debate, but it is on a matter of the utmost national importance.
	I would like to raise the issue of a judgment made at 1.45 pm today by Lord Justice Thomas in the case of Binyam Mohamed, a British resident currently being held at Guantanamo Bay who has made an accusation of British involvement in torture inflicted on him while being held in Afghanistan, Pakistan and Morocco. The ruling implies that torture has taken place in the Mohamed case and that British agencies may have been complicitbut, most important of all, that the United States Government have threatened our High Court that if it releases this information the US Government will withdraw their intelligence co-operation with the United Kingdom on matters of security. The judge has ruled that there is a strong public interest in this information being put in the public domain even though it is politically embarrassing.
	To quote directly from the judgmentI will make this as brief as possible, Madam Deputy Speaker
	It is plainly right that the details of the admissions in relation to the treatment of Binyam Mohamed as reported by officials of the United States Government should be brought into the public domain...we did not consider that a democracy governed by the rule of law would expect a court in another democracy to suppress a summary of the evidence contained in reports by its own officials...relevant to allegations of torture and cruel, inhumane, or degrading treatment, politically embarrassing though it might be. We had no reason...to anticipate there would be made a threat of the gravity of the kind made by the United States Government that it would reconsider its intelligence sharing relationship, when all the considerations in relation to open justice pointed to us providing a limited but important summary of the reports.
	Another part of the report goes on to say that the Foreign Secretary has confirmed that this threat will still remain under President Obama's new Government.
	Madam Deputy Speaker, may I request that you make representations, preferably to the Foreign Secretary, or to the Home Secretary, to come to this House today to make an urgent statement on the involvement of British agencies in torture overseas, and on the right of the United States Government to block a British court from disclosing information given to it?

Patrick Mercer: Further to that point of order, Madam Deputy Speaker. On this alleged piece of bribery, bullying or whatever it is that has just been discussed, at the same time as a statement is made by a Cabinet Minister, may we also have a thorough understanding of what the American regime would like us to do with non-British detainees in the former Guantanamo Bay prison?

Madam Deputy Speaker: I have to inform the House that those are not points of order for the Chair.

Paul Holmes: This police grant statement comes in the second year of a three-year settlement, and in that sense it does not contain any surprises. It remains, however, as was pointed out last year, the tightest police grant settlement for a decade, and as the Association of Chief Police Officers and the Association of Police Authorities pointed out last year, there is a danger of an overall 1 billion shortfall in police funding by 2011. One of the things that they referred to was not just the proportion of money coming from the Government, but the effect of the Government's constant rate-capping and direction on levels of council tax. The Minister and I debated that issue yesterday in a Public Bill Committee. A MORI opinion poll last year found that 87 per cent. of respondents said that they would be willing to pay more if it went towards direct local policing. Whether we would get quite the same response now that the recession is starting to build up is another matter, but, as we argued yesterday in Committee, that choice should be left to the local community and local police authorities under a directly elected system, rather than being decided by diktat by a Minister in London.
	All the points made in last year's debate remain accurate today, and I will not rehearse most of them in detail because they remain exactly the same. Last year, we discussed the amount of police time spent on paperwork, the increase in violent crime, the lack of adequate technology and the constant creation of new offencesmore than 3,500 since 1997. A number of those points have already been touched on in today's debate. On technology, the issue of hand-held devices that would save police time has already been raised. It surprises me that the staff who work for the council housing department in Chesterfield who do electrical repairs, plumbing and so on are all equipped with such devices, and they are all linked to the central control office through them. The logistics of everything they carry on their vehicles to repair council houses are logged and are readable in the central office in Chesterfield, so that when a call comes in for a repair it is not the nearest vehicle that is sent but the one with the right parts. If the staff of the council housing department can have that sort of technology, which makes them so much more efficient, flexible and cost-effective, it seems incredible that the police in Chesterfield cannot have the same.
	The Minister may well say later that pilot schemes are rolling out and developing that technology in various parts of the country, but as with so many experiments with pilot schemes, we have to ask when that process will become universal. It is proven technology, the benefits of which can be seen even in a council housing repair department. Why has it not been rolled out throughout police forces in the UK?
	As a side issue, the right hon. Member for Leicester, East (Keith Vaz), who chairs the Select Committee, mentioned central purchasing. Contrary to our debate in Committee yesterday, I do see an argument for a degree of central collaboration or direction in that case. One police officer whom I talked to in Chesterfield told me that many police forces buy a variety of motor vehicles because there is no custom-built standard for the British police, whereas American police forces tend to have a standard police cruiser. He told me that some of the computer devices provided for use in cars cannot be mounted on the dashboard because there is such a mish-mash of purchasing policy. Vehicles are often too small and not suitable for such new technology. The delivery of technology raises some issues that need be considered, but it is such a basic process in this day and age, it is hard to understand why the technology has not been rolled out across all 43 police authorities.

Vernon Coaker: To nail this point about mobile information devices, I say to the hon. Gentleman that all Home Office-funded police forces in England and Wales, and all police forces in Scotland, have now received funding. We expect 30,000 hand-held devices to be in use by front-line officers in April 2010. Although the technology was originally being rolled out in phase 1, phase 2 is now online. Millions of pounds are being spent to do exactly what the hon. Gentleman suggests.

Paul Holmes: I thank the Minister for that clarification. It would be churlish to say better late than neverbut none the less, that is now on the record.
	On the constant creation of new offences3,500 or more in 10 yearswe are in the process of discussing the 66th Home Office Bill in this area, with the Public Bill Committee considering it starting last week, and it will create a variety of new offences. One proposal that was debated on Second Reading, and which I mentioned in Committee last week, is the fine of up to 500 that is available for people found drinking alcohol in a public place where drinking is prohibited. The current Bill proposes to increase that figure to 2,500, but as we clarified in Committee and on Second Reading, although the maximum fine is 500 no one has ever been fined more than 250, and very few have been fined more than 100. That is symptomatic of a process where legislation is constantly used to grandstandto send messages in pursuit of media headlinesbut has no practical benefit for the front-line police officer. In fact, it can be quite the reverse if it is simply throwing extra regulation and paperwork at police officers on the beat, who have far better things on which to spend their time.
	Legislation on cut-price alcohol sales in supermarkets, however, which the Chair of the Select Committee referred to earlier, would be a much more beneficial and effective process. Regrettably, however, such provisions are missing from the Bill that we are discussing in Committee. I have been on patrol with front-line officers and seen them dealing with the public effects of alcohol, and they would welcome the effects of such legislation far more than a measure that the Minister said was simply intended to send a messageeffectively, to get a headline instead of having a direct, practical effect.
	All of last year's debate remains relevant, although we do not need to return to two parts of it. The current Minister has not had to announce a cut in the numbers of police community support officers from 24,000 to 16,000, as was announced last year, and he has not had to take the flak for refusing to implement in full a police pay award. That happened last year, although officers remain demoralised and angry about it to this day.
	What are the new issues that affect policing? The Association of Police Authorities observed that the next four years will be very difficult. It gave several reasons for that, one of which was the tight funding regime in place between now and 2011, which we knew about from the start of the three-year settlement last year. There may also be cuts after that; we cannot know for certain, but it certainly looks increasingly likely. We are told that many authorities and chief constables face stark choices over the next four years, including inevitable reductions in police officer numbers. We have seen that happen in some authorities already last year and this year.
	At the same time, however, with tighter, sometimes decreasing, budgets and a reduction in police officer numbers, there is a constant expansion in local demand and in the expectations of what the police can deliver. Some of that is a result of modern society. Today, almost universally, people have mobile phones, and they are much quicker to ring the policeor their councillor or MPto make a complaint. They are much more likely, especially at odd hours of the day, to get on the internet and send an e-mail to all and sundry, including the police, councillors and the local MP, demanding action. In the past, they would have had to use a land-line to ring an office hoping to get someone on the other end, and a lot of people did not do that. The 24-hour media that we have these days constantly hype up crime issues, which creates a lot more pressure and expectation from below about what the police can do. Those rising expectations will only increase.
	The Government have the best intentions, which we support, but they too are increasing that pressure. For example, a welcome policy is the idea that everybody in a police beat area, usually corresponding to a council ward, should have access to a mobile phone number that should in theory be answered fairly promptly by the beat officer or PCSO who has that equipment. As that service becomes more publicised and available, it will inevitably mean far more calls from members of the public, putting more demands on the police. If the police cannot meet those demands, it will create a vicious circle of frustration, with the public saying, There's no point. The police aren't doing anything. They never answer. At a time when budgets are tighter, and when budgets and police numbers might fall over the next few years, there will be more and more pressure from the public for more action.
	Another matter that we discussed in Committee yesterday was the community call for action, which was provided for in the Police Act 2006 and is about to be implemented. When members of the public know about that, they will beat a path to the door of their local councillor, whether for their parish, town, district, borough, city or unitary areathe public do not draw such distinctionsand say, I have heard that under the law, you have to take action if I raise an issue with you about vandalism, burglary, nuisance, speeding traffic or whatever. All those councillors will rush off to the appropriate bodiescrime and disorder reduction partnerships, police authorities and so onsaying that they want action. Many of them already do that. With tightening budgets and falling police officer numbers, what will often be the answer over the next few years? We haven't got the resources to deal with that. On top of that, we have increasing Government direction of national priorities and roles, which could clash with the requirement for police authorities to have regard to the views of the local community.

Simon Hughes: It strikes me that given the pressures that my hon. Friend has outlined, and the fact that a lot of people will, sadly, lose their jobs in the coming year, there may be people who are confident, able and willing to be employed by police authorities as civilians, but who would not be willing to become police officers. They could help to do a lot of jobs, provided that the budgets were available.

Paul Holmes: Indeed, and over recent years a lot of authorities have brought more civilians in to release police officers from desk work and get them out on the beat. The more the budget tightens, however, the less possible that becomes.
	As we have heard, another factor to consider is population shifts, which may well worsen, especially those that arise from waves of migrant workers. When the EU enlarged recently the Government predicted how many people would come from Poland and various eastern European states, but their predictions were well under the number who came in reality. The Government said that they expected a lot of those migrant workers to come over here and work for two, three or four years to raise money, then go back to start their own businesses, or to return when the economy changed, as in the case of the recession that is building up.
	The speed of those population fluctuations caused major problems for councils, the health service, schools and the police. The then police Minister, the right hon. Member for Harrow, East (Mr. McNulty), said in last year's debate, Yes, that is a very good point, and we should look at it. The present Minister said the same this afternoon, so when will the action come? What reassurance can the Minister give that there will be fairly prompt action on a matter that has never been dealt withgetting resources quickly to the police, councils, education authorities and others to deal with rapid population fluctuations? Those fluctuations often involve people who have English as a second language, which is another issue entirely. The police in Lincolnshire, for example, have been caused major problems by the soaring cost of their interpretation budget because of the eastern European groups who are working there in agriculture. There are also many such examples in urban areas, and various problems are developing.

Simon Hughes: That is a really big issue for boroughs such as mine as well as for rural areas, as my hon. Friend said. It would be really helpful if Ministers from the Home Office and the Department for Communities and Local Government said that they would take the new information from the Office for National Statistics and put a new, up-to-date system in place by the time of the next three-year grant allocation at the latest. We have not yet heard that, and it must be a minimum demand and expectation.

Vernon Coaker: rose

Paul Holmes: I give way to the Minister.

Vernon Coaker: May I just say that we will do that?

Paul Holmes: That is a very welcome commitment, but it is difficult to see how the Government can react quickly enough to deal with certain population flows. I have spoken to the staff of schools in inner-city areas of Birmingham and London that have had problems. With rapidly fluctuating pupil numbers, it is difficult to get the money flowing fast enough to make a difference rather than provide it two years later. However, I hope that the Government will be able to take action on that.
	Another major issue is the levelling off of police authorities' potential to make cash efficiencies. The Home Office document Efficiency and Productivity Strategy for the Police Service 2008-11 states:
	The financial climate of the next three years will be tougher and achieving significant cashable improvements in efficiency and productivity over 2008-11 will therefore be central to delivering the Police Service's mission of delivering community safety.
	However, the APA points out that in the past 10 years more than 2 billion of efficiency savings have been made, most of which have been recycled into meeting new police demands and supporting the delivery of the service. However, it observes that that has become increasingly difficult in the past year or two, and that in the next few years it will become almost impossible for efficiency savings to be addressed directly to dealing with budget shortfalls. It states that
	the longer term prospects worsen considerably
	because, added to the factors that I have listed, the recession means that there will be a loss of interest income from investments, reduced proceeds from property sales and increased costs of imported goods. It gives the specific example that uniforms, which are generally imported, and some specialist equipment that is imported have already increased in cost by 30 per cent. in the past few months, due to exchange rate changes. The council tax base is nearly static due to continued capping, and the recession is creating more low-level crimes such as burglary, shoplifting, robbery and shed breaking. All those things cause increased demands on the police.
	The most recent quarterly crime statistics, and figures released following a freedom of information request by  The Independent, show increasing crimea widely predicted result of the recession. On 17 January,  The Independent gave the example of forces such as Greater Manchester, Suffolk, Gloucestershire and Cumbria, all of which had seen
	increases of between 25 and 50 per cent. Lincolnshire police saw the biggest rise, a 97 per cent. increase in robbery between September and Novemberthe most recent three-month period collated by the forcecompared with the same three-month period the previous year.
	Those figures were more up to date than those that the Home Office released a month later, which raises the point that we have often made about the need for believable independent statistics. If the Government were to pass the responsibility for the figures entirely to the Office for National Statistics, that would remove all the questions about their validity and their early or late issue for political reasons. The statistics that were produced, partly through a freedom of information request, showed a clear increase in crime at the lower level of burglary, shed breaking, robbery and so on, co-ordinating with the start of the recession. That was exactly what history told us was likely.
	A rise in crime produces more work for the police and puts more strain on them. It means that they need more manpower and potentially more overtime, yet all that comes at a time of tightening and eventually decreasing budgets and falling police numbers. Police authorities need some specific answers. First, will the specific central Government funding for PCSOs, and for the substantial number of police who are funded by direct special grants rather than the general grant, remain in place after 2011, to which date it is guaranteed?
	Secondly, the Government brought forward 3 billion of capital spending to assist in economic recovery, but none of it went towards improvements in the police estate. We are told that the Government are preparing a further tranche of that funding as part of the forthcoming Budget. Do the Government have any further plans to release capital investment in the police estate? That would boost the construction industry, create jobs and, above all, take pressure off local police authority budgets where there are dilapidated police stations that need replacing and other facilities that need improvement.
	The issues that we have considered so far apply generally to all 43 police authorities in England and Wales. However, some issues apply more to specific police authorities. For example, 15 police authoritiesjust under 30 per cent.were affected by the Icelandic banking crisis. The outcome of the crisis, and, therefore, its full impact, remain unclear and will be for some time. The increasing uncertainty and risk for the affected authorities is a cause of great concern, and the Government have provided support so far. Continuing Government support for repaying the loans involved is required, especially if repayment is delayed or money has to be written off as a result of what happened in Iceland.
	Another much bigger and longer-running issue affects some but by no means all police authorities, and several hon. Members referred to it earlier. It is the formula for funding police authorities. To the Government's credit, after saying that they would tackle the matter in 1997 when they came to power, they eventually introduced a fairer funding formula nearly 10 years later. However, they told the worst-hit authorities that it would be years before the underfunding was made up. Telling police authorities that they were underfunded by specific amounts but that they could not have the money caused consternation. As yet, no date has been set for ending the floors and ceilings mechanisms and the underfunding of so many authorities.
	The Minister has already referred to the fact that all the police authorities in the east midlands, parts of which we both representin Northamptonshire, Leicestershire, the Minister's area of Nottinghamshire and my area of Derbyshireare affected, as are many others throughout the country. He said this afternoon that the formula is being reviewed again for 2011 onwards. However, let us remember the history.
	Before 1997, the shire counties that lost out worst from the funding formula had a long-running campaignthe F40 campaign. In 1997, the Government said that they would review the position. In 2006-07, nine years later, they introduced the new formula but said that they could not provide the money that they admitted authorities needed.
	I shall now be slightly parochial. Last year, Derbyshire was the fourth worst-funded police authority in England and Wales. This year, it sank to third lowest, with only Suffolk and Essex in a worse position. Under the new, fair formula that was introduced in 2006-07, Derbyshire has lost 16 million so far. The Government say that Derbyshire needs that money to provide adequate policing, but that it cannot have it. This year, Derbyshire will lose another 5 million, and another 5 million in the subsequent year. That is equal to 3 per cent. of the force's entire budget every year and more than 160 police officers on the beat.
	Derbyshire has had to plug the gaps in the underfunding by using its reserves, but they are coming to an end. In a year or two, there will be no more reserves to plug the gap in the funding that the Government say that Derbyshire needs, but that they will not provide. It is impossible to understand why the worst funded authorities in the country, some of which, like Derbyshire, have experienced the problem for more than 20 years, must bear the brunt of a tight police grant settlement.
	Police officers and constituents in Chesterfield simply cannot understand that we are the third worst-funded police authority in the country yet we must continue to be underfunded because of overall problems with the police grant.
	The Minister said that he had received only 15 representations this yearfar fewer than last year. Perhaps police authorities have simply given up because they meet the same stonewalling every year. Will the Minister offer any genuine hope to the worst-funded authorities, such as Derbyshire, that all the unequal funding of recent years will end? After all, the councils and fire authorities that suffered from the funding formula have had their historic problem removed and levelled out much more quickly. Why are police authorities singled out to bear the brunt of what the Government admit was an unfair formula, saying that they should have more money, but that they cannot have it?

Stephen Crabb: I am grateful for the opportunity to participate in the debate on the police funding settlement this year. I shall focus my brief remarks on my police force area of Dyfed-Powys. Last week, in Westminster Hall, the hon. Member for Ceredigion (Mark Williams) initiated a short debate on the subject, and I am grateful for some of the assurances that the Under-Secretary of State for the Home Department, the hon. Member for Tynemouth (Mr. Campbell) gave in response to it. I am also grateful for the Minister's comments today; I appreciate the steps that are being taken to ensure parity between English and Welsh forces, and the 2.5 per cent. grant floor.
	I want to impress on Ministers the deep concern among members of the Dyfed-Powys police authority and officers at various levels in the organisation. In last Wednesday's debate in Westminster Hall, the Under-Secretary said that he had received no representations from the authority this year on the settlement. However, I assure him that Members who represent constituencies in the area have received strong representations. That is shown not only by the fact that I am raising the matter, but by the presence of the hon. Member for Brecon and Radnorshire (Mr. Williams) and the intervention by the hon. Member for Montgomeryshire (Lembit pik).
	Let me reinforce some of the points that we have been trying to convey to Ministers in recent weeks. The starting point is the enormous area that the Dyfed- Powys police force coversthe largest in England and Wales, taking in the counties of Powys, Ceredigion, Carmarthenshire and my county of Pembrokeshire, and comprising hundreds of disparate small villages and small town communities. Hon. Members who go on holiday to mid and west Wales will be familiar with the long, slow roads in the area. That poses significant challenges to policing. Given the size of the police authority area, it is worth pointing out that Dyfed-Powys has the third smallest police force. That immediately poses a challenge to the chief constable of how to deploy personnel across such a vast area.
	Last week, in the Westminster Hall debate, the Under-Secretary described Dyfed-Powys police authority as well resourced. Like many hon. Members, I have a six-monthly night out with my local police. On a Saturday night, the police authority does not feel especially well resourced. All it takes in my police division of Pembrokeshire is one road traffic accident, a fight outside a local nightclub and one domestic violence incident for the force to start to feel stretched.
	I want to put on record the important role that volunteers play in the police force. On my most recent Saturday night with my local police, I witnessed the important role that not only special constables, who give up their time, but volunteers in the CCTV control centre, play. We want to encourage such volunteering. There are all sorts of benefits from engaging more civilian volunteers in police operations, but the police should never have to perceive volunteers as an absolute necessity for delivering policing at busy times such as a Saturday night.
	Other factors in the Dyfed-Powys area are relevant to the discussiontourism, for example. In the summer the population swells considerably. The pressure on public services arising from a significant increase in the local population in the summer months is never fully taken into account.
	We also have an enormous coastline, which includes two major ferry ports, connecting west Wales with Ireland, at Pembroke Dock and Fishguard. We have the growing energy hub at the port of Milford Haven, with two of the UK's major oil refineries, the UK's largest fuel storage depot and the two major liquefied natural gas terminals, which will come on stream shortly. I shall say more about the LNG terminals shortly.
	Dyfed-Powys police do a remarkably good job, given their resources and the challenges they face, in holding down crime rates and reassuring the public. They have achieved some excellent scores in crime detection and bringing rates down across the full range of crimes. However, a member of the police authority told me that some of the statistics, which on the face of it are good news stories, are
	somewhat fragile and patchy in some areas of activity.
	The force admits that some of the confidence and public satisfaction scores that it gets are not quite as good as they should be. I share the concerns that have been communicated to me by the police authority, not only about the tight settlement for this year, but about the uncertainties surrounding funding in future years and about what might happen to the rural police grant. Those concerns mean that the authority has serious questions about its ability to improve on its current scores.
	Dyfed-Powys police force has made great progress in the past few years on achieving efficiency gains. Between 2005-06 and 2007-08, it achieved efficiency savings of 9.8 million, well above its target of 7.3 million. The theory is that the force should be using those efficiencies to invest in, for example, protective services and other Government priorities. However, the force tells me that it has to use those efficiency savings just to maintain baseline services, and there is very little capacity to make improvements. The force has particular concerns about the expectations in the policing pledgeabout its ability, for example, to respond to emergency and non-emergency calls within 20 minutes on all occasions, and about the timescales in which victims of crime need to be informed. Being able to meet those expectations is challenging.
	Several hon. Members have already mentioned the rural police grant. I would like to reiterate the points that have been raised. There is concern in Dyfed-Powys police force authority about the future of the rural police grant. I am not, perhaps, expecting the Minister to say any more about that than his colleague has already said in this debate, but I would like to impress upon him the needs of rural areas and the challenges that rurality throws up. If he cannot say what the future holds for the rural police grant, I would be grateful if he could give an indication of what his thinking is on how different aspects of rurality will be taken into account in the discussions and considerations about the future of the rural police grant.
	Let me return to my point about the liquefied natural gas terminals. There is significant concern about how well protected those facilities are. Just to remind hon. Members, in the years ahead the two LNG terminals will have the capacity to import 30 per cent.almost a thirdof the UK's entire natural gas requirement. They are clearly a significant piece of national infrastructure. I do not expect the Minister to comment on that in great detail, but concern has been communicated to me about a proposed reduction in the funding for officers engaged in security work at the port of Milford Haven. I do not want to speculate about why that might be so or about where else resources might be deployed. However, if the Minister receives an application from the police force in Dyfed-Powys for additional resources to support the policing of the LNG terminals, I would ask him to look favourably on that request.

Roger Williams: It is a great pleasure to speak in this debate, albeit only briefly. I commend the Minister on the fact that he has always been responsive to representations made to him about the police settlement. Indeed, I think that I am the third Member from the Dyfed-Powys police area to contribute to today's debate. We do so on the basis that we are very proud of our police force. The people who live in the Dyfed-Powys area are basically satisfied with the service that they get. They complain from time to time about police visibility, but we live in a sparsely populated area. It is a challenge for the chief constable to deploy his forces around that area to give people confidence.
	However, the force does a lot of good. I attended an event last week at which awards were given to police officers, specials, police community support officers and back-room staff for the work that they had done in the Powys area. The citation on each award read For making Powys a safer place. That must be the aim of the police force.
	The hon. Member for Preseli Pembrokeshire (Mr. Crabb) raised a number of points, which I would like to reinforce. In a way, the representations that we are making today are not about the present police settlement, but about its future. Mention has been made of Ronnie Flanagan's report, which, if I understand it correctly, says that the formula must be adhered to more strictly. However, the fact that the funding for many Welsh police forces depends on exceptions being made to the formula, rather than on the formula being delivered right across the piece, is important. Indeed, if the floorthe minimum of 2.5 per cent. of the settlementwere not implemented for all four Welsh police authorities, there would be a loss to those authorities of 15 million.
	I also want to mention the rural policing grant. The rule 2 grants make a contribution to the funding of authorities, but most of those grants are spread among all the police authorities, whereas the rural policing grant goes to only a limited number of authorities. That being the case, certain police authorities would suffer disproportionately if the rural policing grant were abolished or if the rule 2 grants were brought within the formula. If that happened, it would be difficult for Dyfed-Powys police to maintain the standard of policing that the people living in the area have come to expect. If we were to aspire to the same level of policing, there would be a huge increase in the precept, and in the council tax that people would have to payand we know how unfairly council tax falls on the lowest paid in our communities.
	I want to comment on one other issue. At the moment, the area that I represent has only one set of custody cells for an area that extends for about 80 miles south to north and about 40 miles east to west. That means that putting somebody arrested in Llandrindod Wells into a custody cell requires a journey of at least 30 miles, which takes police officers away from their duties, just to take a prisoner from a police station without a custody cell to one with a good custody suite. It is important to make the appropriate capital investment in the infrastructure, so that the police can spend their time dealing with the issues that the public expect them to deal with, rather than having to transport prisoners.

Stephen Crabb: The hon. Gentleman is making an important point about custody suites. We have a new all-singing, all-dancing custody suite in the Pembrokeshire division. However, officers have raised with me concerns similar to the hon. Gentleman's point, about how making arrests in different parts of the area now ties up an awful lot of police time. One of those concerns is that the new custody suite might create a disincentive to bringing into custody people who would previously have been taken into custody closer to where the offences were committed.

Roger Williams: I agree with the hon. Gentleman. Both of us are making the point that investment in capital workssuch as new buildings and new custody suitescan improve policing quite considerably, to an extent that would be noticed and appreciated by the general public. I am talking in particular about Llandrindod Wells, where there is a scheme for a new police station with custody cells and a magistrates court, which will be integrated with an ambulance station and a fire station, so that we can have all the emergency services co-operating as one.
	Although we in the Dyfed-Powys police area accept the present settlement and understand the circumstances in which it has been made, we are not happy with it. We look forward to a review of the formula to make it work, although we view that process with trepidation. We understand that there is only one representative from Wales on the group that will review the formula. We just hope that Wales's special needs will be reflected in the outcome of those considerations.

Robert Wilson: This is a welcome opportunity to debate the police grant settlement, which forms about half of the police's funding, the rest coming from the local government finance systema combination of revenue support, non-domestic rates and council tax. There cannot be many MPs who are entirely happy with the Government's handling of the police pay settlement last yearwe all received a sizeable postbag on the matterbecause the Government clearly got it wrong, and Ministers probably regret the way in which they handled it at the time. The pay settlement has left a legacy of bitterness. I can still go into my local police station in Reading and see the posters on the wall that say Tough on crime, tough on the fighters of crime. I know that the Government have since tried to address the pay settlement, but the bitterness will remain for some time. What happened has been neither forgotten nor forgiven.
	I am delighted to have this opportunity to pay tribute to my local police force, the Thames Valley police, for its continuing hard work and good performance. This year's unremarkable police settlement reflects the overall spending review provision from the Home Officethat is, no real-terms increase. This translates into a 2.7 per cent. increase in the general police grant for 2009-10. It is true that Thames Valley police is quite fortunate, because it is one of the police authorities to receive a higher police grant allocation, compared with other shire authorities. It will receive 238 million this year, which equates to a 2.7 per cent. increase on last year's settlement. That is not one of the highest settlements, but, fortunately, it is not one of the lowest either. I am grateful to the Home Secretary, who recognises the importance and the position of the Thames Valley force, because of its close proximity to London, and has allocated funds accordingly. Despite that, however, there are certain issues that it will be useful for me to put on record today.
	I have mentioned before that the Thames Valley police force suffers from considerable problems of officer retention. A major concern is that the Metropolitan police is able to pay its officers much more than Thames Valley police can pay its equivalent officers. The Met is also able to give its officers free travel within a 70-mile zone right around London. The south-east allowance, which was introduced a few years ago in an effort to curb a further manpower drain, has remained frozen, while the Metropolitan police's London weighting allowance has continued to rise.
	The incentive gap has therefore become wider, and it has become much more attractive for Thames Valley officers to move to London to improve their economic position. This is now causing a serious problem for the Thames Valley force. Its chief constable, Sara Thornton, giving evidence to the Home Affairs Select Committee when it happened to be meeting in my constituency, said that she would be in favour of increasing the south-east allowance by 1,000 a year to make it easier for officers living in the south-east not to get sucked in by the extra pay and free travel that they would get for working in London.
	I believe that the chief constable has since metand continues to have an important dialogue withthe Home Secretary and the Minister for Policing, with the intention of introducing the flexibility further to increase the south-east allowance. In a debate in Westminster Hall last week, it became clear that Thames Valley police had the money in its budgets to fund that allowance and to make it available. During the debate, I think that the Minister said that an uplift in the allowance in the south-east would cost about 20 million, and that he referred to a figure of about 2 million to achieve the uplift in the Thames Valley police area. I hope that he will correct me if I am wrong.

Vernon Coaker: I have not got the figures for the south-east allowances with me at the moment. However, I did say that the moneys in the budget for those allowances were not a matter of additional resource, which I think was helpful to the general debate. Perhaps the hon. Member for Bury St. Edmunds (Mr. Ruffley) will verify that. I also said that this is not a ministerial decision; it is a matter for the Police Negotiating Board to come to an agreement with all the various bodies involved on how to resolve the issue. While I am on my feet, I should also like to say, in response to being asked to have a word about these matters, that it was not so much a matter of having a word; it is just that I saw this as a matter for the board and as a priority for it to resolve it. I know that that is what it is trying to do.

Robert Wilson: I thank the Minister for that intervention. I am absolutely delighted to hear him repeat that this is a matter for the Police Negotiating Board; that was stated last week and it has now been repeated this afternoon. I welcome that statement.
	If the Thames Valley force takes its case to the negotiating board and is successful, it will be committed to paying that additional allowance. I hope that that will go some way towards alleviating the problem of experienced officers being sucked into the London Metropolitan police area. I should like to make it clear that I am not advocating any additional grant resources to the Thames Valley, but if the force is to retain its best officers, it will need the Minister's support to try to resolve this situation.
	Its costs the Thames Valley police 55,000 to train each trainee constable, but it has lost 242 officers in the past five years. It would be a drain on any force for those numbers to continue, and this issue is an increasingly difficult problem and a big financial drain for the Thames Valley force. Anything that the Minister can do to help will certainly be appreciated by the chief constable.
	Thames Valley police has become a training ground for the Metropolitan police, and my constituentsalong with the other people served by the force in the wider Thames Valleywill undoubtedly suffer a poorer service if that is allowed to continue. Indeed, the chief constable has said publicly that the force is a very young one, and that it needs experienced officers as part of the overall mix of officers in the area. In addition to the 1,000 uplift for police pay in the Thames Valley force that the chief constable is asking for, there also needs to be an agreement with the Metropolitan police that it will not poach significant numbers of police officers. That would be extremely welcome to the chief constable in the Thames Valley, and I am sure that the Minister will do all that he can to facilitate such an agreement.
	I would like to raise a number of other financial issues, particularly in relation to population growth. The chief constable has raised significant concerns about the impact of population growth right across the Thames Valley, and I know from my experience of living in Reading for the past 25 years that the city has grown significantly in that time. Of course, more recently, immigration has added enormously to that population pressure. Several years ago, I was briefed by the police in Reading that much of the serious organised crime in Reading was run by immigrants, many of whom were in the country illegally. I would be interested to get an update on that from Thames Valley police, and to hear whether the Minister has any further information on whether there has been any improvement.

Stewart Jackson: My hon. Friend is making a strong and compelling case. Does he agree that the problem with the extrapolation of population statistics with regard to the funding formula is that they are based on out-of-date figures from 2004, and that those figures should have been updated before the comprehensive spending review? Does he agree that this is having a direct impact on front-line policing across the country?

Robert Wilson: My hon. Friend makes an excellent point. I know that Slough has had many problems dealing with extra numbers and the resultant financial pressures put on many public services. No doubt Peterborough faces a very similar set of challenges.
	The impact of population growth on police services needs to be recognised, so it is only right for the police authority to be consulted on major spatial plans, for example. Support to secure resources from the planning system to meet the costs of infrastructure development is also important for the policing of the expanding Thames Valley region. All that certainly needs to be looked at. We need to think about whether section 106 money should be used to help support the additional policing infrastructure that will be necessary in the years to come as the population expands. That is worth considering. I know that at this particularly difficult time in the middle of a recession, local authorities are going to guard jealously their income from section 106 money, so it is not going to be a particularly easy nut to crack if the Minister decides to go down that particular avenue.
	With the current level of population growth, Thames Valley police estimate that their capital costs for new buildings and so forth will be about 90 millionjust to keep pace with the level of services provided now. The chief constable has said that the force will have real problems trying to generate that level of capital receipts, so it looks as though there might be another funding gap in the future. He also estimates that the number of staff, including officers, that Thames Valley will need will have to grow to about 1,200again just to maintain the current level of policing services.
	I know that there is a link to population in the revenue support grant, but the floors and ceilings apparently mean that minimal additional revenue grant will be generated for the Thames Valley police. That needs to be looked into further. There are also other funding pressures. The Olympics, for example, is clearly going to suck in resources from the Thames Valley, and it would be interesting to hear the Minister explain how that extra resourcing might be handled and what sort of extra support a force such as Thames Valley will be able to get when it has to provide so many police officers for the Olympics.
	Counter-terrorism is another important issue. I cannot speak as freely as I would like on this occasion, so all I will say is that a significant threat still remains within the Thames Valley. I know that there is a specific grant for counter-terrorism, for which we are very grateful, but the pressure is likely to get much worse before it gets better. There is the potential for extremism in Reading, Slough, High Wycombe and other centres in the Thames Valley despite all the excellent work that goes on in those local areas to combat the threat.
	I have recently been critical of the detection rates of the Thames Valley police. It is actually one of the worst- performing authorities in the country in that respect. We are not doing well, and that needs to be said. However, I say it as a friend, albeit a critical friend, of the Thames Valley police. The force is doing many things particularly well, but there is enormous room for improvement on detection rates.
	I would like to say that we have a particularly good team in Reading, made up of active, responsive and forward-thinking officers, and I would like to repeat the praise I expressed in last week's Westminster Hall debate for Superintendent Steve Kirk, who does a quite outstanding job across my Reading, East constituency. I have also been very pleased by the roll-out of neighbourhood policing in my constituency. It has the potential to make a real difference over time, particularly if it is coupled with a drive to reduce red tape and bureaucracy.
	The impact of all the extra money that has gone into policing over the years has to some extent been dissipated because police officers spend less and less of their time on the street performing their front-line duties. There is way too much bureaucracy put upon police officers. I have heard that from them first hand. Like many colleagues, I have been out on my mountain bike with officers in Reading, East; I have been out in the town centre in a van, and I have spoken to officers. They have told me many stories. For example, I heard about an officer arresting a shoplifter at 9.30 in the morning and then having to write off the entire shift while he processed that one person through the system. There are, of course, many more such examples that I am sure colleagues could add. If we could sort out those problems, we could get more return on the investment we make in police officers. In turn, that would massively improve the prospects of neighbourhood policing making an impact.
	As I said earlier, I am not asking for more money. I do not think that the Thames Valley police actually need any more money today, but they may well need money in the near future. Any support in the particular areas I mentioned would, I am sure, be very welcome to the chief constable of Thames Valley police.

Stewart Jackson: I express my sincere apologies for not being present at the commencement of the debate [Interruption.] The Minister says from a sedentary position that I have been busy writing my speech.  [Interruption.] In fact, I have been delayed by the vicissitudes of National Express East Coast in travelling down from my constituency.
	I am pleased to have the opportunity to debate the police grant settlement for 2009-10. I pay tribute to my local police force, the Cambridgesire constabulary, and particularly to the northern basic command unit, which covers my constituency, under the leadership of Chief Superintendent Andy Hebb. They are all doing a very difficult job on behalf of my constituents.
	I want to talk about the very real funding difficulties experienced by the Cambridgeshire constabulary. Members will know that I have raised the issue on a number of occasions and that I was fortunate enough to secure a Westminster Hall debate in February last year on police funding in Peterborough and Cambridgeshire. Peterborough and Cambridgeshire, along with Kent and Lincolnshire, are in a parlous financial position. They urgently need a review of their formula allocation for the next financial year as well as, I would argue, a review for 2010-11. The allocations should be reviewed as a result of a unique set of circumstances, which I will outline to provide some background.
	Cambridgeshire is to receive a 3 per cent. increase in its formula funding allocation in 2009-10, despite the fact that it has the third lowest number of police officers per head of population in the whole of England and Wales. In the northern basic command unit, incorporating my constituency, we have actually a seen a fall in the number of full-time equivalent police officers over the last six years. Indeed, the Minister provided that information in a parliamentary answer to me on 29 January, which appears in column 828W of  Hansard. A table shows a fall from 215 officers per 100,000 people in 2003 to 178 in the last financial year.
	Hon. Members will be aware of my consistent lobbying over a number of years for fairer funding for Cambridgeshire. I will not rehearse all the arguments that I raised in the Adjournment debate, at which the Minister was present, but it would be apposite to refer to a number of them today, because in many respects we have not moved forward over the last year.
	Cambridgeshire has been among the five worst-funded police authorities in the last six years. Like other police authorities, it will be asked to bear real-terms cuts over the next two years at least, as well as general inflationary pressure and Home Office edicts in respect of efficiency savings, first outlined in the comprehensive spending review of 2007. As the Minister will know, the authority has little effective discretion to alter that dismal situation within the prevailing capping regime.
	I commend to the House an excellent report published in November 2007, entitled The changing demography of Cambridgeshire: implications for policing. It focused on the specific demographic, social, economic and cultural changes that face the county over the next 10 years or so, including population changes, migration from both within and outside the United Kingdom, growth in higher education numbers, issues involving Gypsies and travellers, and tourism, which is, of course, a particular issue in the Cambridge area.
	Today, however, I wish to focus on the practical impact of migrationspecifically European Union migrationon my constituency and throughout Cambridgeshire, its particular impact on crime and policing, and the financial impact that that will inevitably involve. I recently met a member of the police authority who explained to me that if a police officer in Peterborough stops an individual from, say, Lithuania or the Czech Republic in connection with the committing of a possible offenceor, indeed, if that person has been the victim of a crimethe need for translation and interpretation services can double or treble the time that it takes to process the individual.
	Cambridgeshire constabulary's recent briefing to the Migration Impacts Forum, published last month, illustrates the significance of that example. In every month of the calendar year to 31 December 2008, with the exception of January and June, more than 20 per cent. of detainees processed through the custody suite in the northern basic command unit were non-UK citizens. In the last year, across the whole force, 800 Lithuanians, more than 700 Poles and 300 Portuguese citizens have been processed, most of whom spoke little orusuallyno English.
	Use of Language Line, a telephone translation and interpretation service, increased last year from an average of 373 calls per month to 497 per month in the period up to November 2008. In the last financial year Cambridgeshire spent 1 million on translation and interpretation services, whereas in 2002 it spent only 224,000. Moreover, 50 per cent. of detainees questioned about drink-driving and disqualified driving offences in the northern basic command unit were non-UK citizens, while 84 per cent. of the 213 warrants issued by the magistrates courts in Peterborough for minor offences were issued for EU nationals.
	Ministers have known for at least three years about the impact of large-scale immigration on policing but have failed to reflect it in their funding allocations, despite the promises to listen and act delivered by this Minister, his predecessors and, indeed, Home Secretaries during Home Office questions over those three years. I concede that this is, not to put too fine a point on it, more a cock-up than a conspiracy. I do not agree that it is necessarily an issue of whether a police authority is in a predominantly Conservative or a predominantly Labour area. However, Ministers are not listening. Despite visits to Peterborough and visits by delegations consisting of senior police authority members and the chief constable, nothing has been done. Indeed, we are going backwards.
	As I made clear in my intervention on my hon. Friend the Member for Reading, East (Mr. Wilson), these funding decisions are based on completely flawed population estimates, and Ministers have failed to act to correct them. On 27 November 2007, in evidence to the Home Affairs Committee, the then immigration Minister, the right hon. Member for Birmingham, Hodge Hill (Mr. Byrne), said that funding to 2010 would continue to be based on 2004 sub-national population data
	simply because that is the best available data.
	That is not the basis on which to make these funding decisions, because the methodology and the data are flawed.
	As was rightly pointed out by the chief constable of Cambridgeshire, Julie Spence, in evidence to the Select Committee:
	There is nothing within government to be able to respond to the rapid changes that have happened...The funding formulas are not rapid and flexible enough to deal with change.
	Similar views were expressed by the Local Government Association in its November 2007 report Estimating the scale and impacts of immigration at the local level, and in a report published by the House of Lords Select Committee on Economic Affairs in the 2007-08 Session entitled The Economic Impact of Immigration.
	According to the recent Migration Impacts Forum report, the tragic murder of a young Polish man in Peterborough in September last year
	impacted heavily on constabulary resources and was made even more complex because of the language and translation issues involved.
	It gives one simple example, which is that
	over 40 Polish citizens had to be interviewed and statements taken.
	The House can imagine how resource-intensive that process was for a force that is already under-provisioned in terms of front-line police officers.
	Even without those specific migration factors, Cambridgeshire will be struggling to deliver the police service that local people deserve and need. In 2007, the Association of Police Authorities estimated that the current comprehensive spending review funding regime would result in a funding shortfall across the country of at least 831 million. In a report prepared for the police authority 18 months ago, the management consultants KPMG concluded on the basis of the Cambridgeshire constabulary's current work load that the county required at least an extra 100 officers. Let me put in context how badly underfunded my local constabulary is: just to achieve the average funding and provision of front-line officers for England and Wales, Cambridgeshire would need at least 600 more police officers, at a significant revenue cost.
	Despite warm words from the Minister, who is an agreeable chapI think we can all agree on thatand several deputations from the police authority and the chief constable, we are no further forward this year. The Government continue to undercount population numbers and to underfund core police service activity. Cambridgeshire is losing more than 2 million per annum, which has a major year-on-year cumulative effect, as a result of the funding floors. The force has the fourth lowest number of police staff per head of population in England and Wales. The 2010-11 pay deals, amounting to about 2.5 per cent., mean that it will experience a real-terms cash decrease.
	I have not even discussed Cambridgeshire's capital programme. The 1.5 million to be allocated to the force in the next financial year will be only just enough to cover the vehicle replacement programme; it will not cover other key projects, such as the rebuilding of police stations in Parkside, Cambridge and Huntingdon. We are not demanding extra funds for fashionable budget headings such as protective services and counter-terrorism, or the Olympics. Thank goodness, we do not have a major problem with knife crime, gangs and guns; we do, however, require fairness and equity.
	For too long, Cambridgeshire's pleas have been ignored and the police authority short-changed, and our dedicated and professional police officers on the front line protecting us have been forced to do much more for much less. This situation is unfair, intolerable, iniquitous and ultimately unsustainable. It cannot go on. My constituents deserve better, as do those of other Cambridgeshire Members. I hope the Minister is listening, and that, for once, we have action and not just words.

James Brokenshire: This has been an interesting and informed debate. Several Members passionately expressed their feelings about policing issues, especially the current grant settlement. In common with many contributors, I would first like to record my congratulations and praise for the work police officers do not only in my constituency, but across the country. It is always humbling to go out with the police and see the work they do at the sharp end, often in difficult circumstances. It is important to recognise that in the context of this debate, which, by necessity, focuses on funding streams rather than the practical work the police do throughout the country in protecting us and providing safety to the communities we represent.
	This debate has, of course, focused heavily on the grant settlement. It is important to recognise the changing funding arrangements and the shift in burden from direct central Government grant to local authority precept. In 1997, direct grant represented 85 per cent. of forces' revenue, but in 2006-07 the figure had fallen to 60 per cent. Therefore, an increasing proportion of the funds going to our police forces is coming from council tax payers in our areas rather than from direct grant. It is important to recognise the amount of funding that is coming directly from council tax payers, rather than from central Government.
	There have been some good and important contributions to the debate, and I wish to place on record my congratulations to the Home Affairs Committee on the work it undertakes in putting a number of important issues into the public domain, and thereby informing the general discussion and ensuring that relevant matters are given the attention they deserve. The right hon. Member for Leicester, East (Keith Vaz) raised some important issuesfor instance, alcohol-related crime, which he and I have debated on several previous occasions. I certainly recognise the link between alcohol and violent crime and the pressures our police forces have to withstand, and the difficulties and challenges they face, in the early hours of the morning. In that context, there is an issue to do with pricing, and the right hon. Gentleman covered it well in his contribution.
	In terms of funding arrangements and the efficient use of resources, Government, and particularly Home Office, IT projects are of relevance. The right hon. Member for Leicester, East made an important point about the funding and status of the police portal and the dispute around the contract associated with that. I hope that the Minister will be able to shed some further light on those issues when he responds to our debate. Other IT projects also deserve further scrutiny, such as the Pentip computer system intended to register penalty notices for disorder and other policing matters, which is over budget and running late. It is important that we get good value for money and that procurement issues are dealt with appropriately.
	The hon. Member for Chesterfield (Paul Holmes) made important points on procurement and ensuring that we get good value for money and have efficiencies. I think that is recognised in all parts of the House, as is the importance of forces being able to share in certain aspects of procurement.
	My hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) rightly highlighted the challenges facing many rural police forces, and in particular how population flows caused by tourism can have a big impact on the ability to police. The problems he raised to do with tourism and swells in population are shared by a number of police forces.
	The hon. Member for Brecon and Radnorshire (Mr. Williams) made the important point that we should recognise the work of those officers who ensure safety in our community, and he commented that his area of Dyfed-Powys had been made a safer place. He also said that we must look to the future, and at the review of the funding formula, to which the Minister alluded in his opening remarks.
	My hon. Friend the Member for Reading, East (Mr. Wilson) highlighted the issue of officer retention and some of the challenges in terms of the relationships between police forces, particularly in the areas surrounding London. We look forward with interest to the continuing discussions of the Police Negotiating Board on south-east allowances, which are of direct relevance to a number of Members who have made contributions; the Minister mentioned this.
	My hon. Friend also made some important points about counter-terrorism and the Olympics budget. We look forward to receiving further details from the Minister on that budget. Some scrutiny needs to be applied, and we need to have a better understanding of the Government's position and of the costs and impact of all that on police forces throughout the country and their budgets.
	My hon. Friend the Member for Peterborough (Mr. Jackson) is passionate about the issues facing his Cambridgeshire area. His comments reflect those of the chief constable, Julie Spence, on the difficulties and challenges in respect of movements of population and whether the funding formula adequately takes them into account, particularly as it is based on information that dates back to 2004.
	Clearly, this discussion is part of a wider debate on the comprehensive spending review, and it is interesting to note that when the first police funding grant was settled, Tim Brain, chief constable of Gloucestershire police and the Association of Chief Police Officers lead on finance, made the following prescient point:
	We don't all start on a level playing field, and some, possibly many, forces will have to continue to introduce planned cuts at a local level. Furthermore, the grant settlement will help maintain most aspects of 'business as usual' but is likely to restrict key development.
	His comments then are equally relevant now in terms of some of the pressures and challenges police forces have to address and the fact that those challenges are changing and growing. We have heard about the pressures in relation to the growth of different communities and new communities arising, one of which is translation costs; according to Freedom of Information Act information, in the last financial year the cost to police forces throughout the country is about 25 million. That cost has risen significantly in the past five years, probably by about two thirds. It is also worth remembering that additional policing pressures arise from this.
	It would be useful to hear from the Minister about the context and framework of the review of the police funding formula. What will the parameters of that review be, and to what extent will it take into account changes in population and the practical impact that has on police forces and how they manage their budgets? I hope he will be able to give more details when he responds to the debate, and to confirm the timing of the review, whether he expects to publish interim findings, and how this will interrelate with the next comprehensive spending round. That will be important in informing the debate, and in explaining how things will link with the funding arrangements for the police as we move towards the next comprehensive spending review.
	A number of different factors are putting increasing pressures on the police. As, sadly, we all know, there is a downturn in the economy, with an accompanying risk of an increase in volume acquisitive crime. The Home Office appears to have recognised and accepted that this will lead to an increase in crime, although we are getting some mixed messages from the Home Secretary about whether she agrees with that perspective. I am thinking of the leaked memo that indicated that the Home Office was expecting a rise. Will the Minister confirm whether he agrees with the memorandum or with the view of the Home Secretary that there might not be such a rise? There are also other pressuresnot simply direct burglaries and frauds, which have been focused on, but emerging threats. He knows the interest that I take in the growth in cybercrime and internet crimethe different types of emerging problems that are complex and technical and for which there have been few prosecutions under the Computer Misuse Act 1990. We need to address the reliance on forensics and how dealing with that type of criminality will need to feed into and inform future funding arrangements because of the additional pressures that it will place on policing; we need to respond to the changing nature of the threats that emerge.
	The Flanagan review made an important point about the pressures on policing; it said that the current level of policing numbers was unsustainable. Notwithstanding the fact that police strength numbers remained flat, according to the last figures, will the Minister say whether he agrees with Sir Ronnie's view that police force numbers are unsustainable? If he does, will he say what assessment he is making of any reductions that might apply and how that fits into the context of the current settlement and, indeed, future ones?
	This important debate has given many hon. Members the opportunity to highlight the financing challenges and problems that may be faced in ensuring greater safety in their communities. We look forward to hearing further details on the funding formula and on how the Minister intends to review and reform it to ensure that it provides for, and reflects the needs of, our communities and is responsive to changes in threat, in population and in need. We look forward to continuing the debate in the months ahead.

Vernon Coaker: I thank all hon. Members who contributed to this debate for the informed and interesting way in which they made their points. I shall try to answer the questions that have been raised and deal specifically with some of the points.
	I agree very much with the hon. Member for Hornchurch (James Brokenshire) about the fact that all of us should start these debates, as we have done, by paying tribute to police forces across the country for their work and the fact that they often put themselves in very dangerous situations to ensure public safety as far as they are able.
	The hon. Member for Bury St. Edmunds (Mr. Ruffley) again sought confirmation about capping. He will know that Cheshire, Leicestershire and Warwickshire were capped in advance for 2009-10, limiting their council tax increases to 3 per cent. That situation stays the same. They had 21 days from 26 November in which to appeal and none did sothat was the point that my right hon. Friend the Member for Leicester, East (Keith Vaz) made; the approach we took significantly helped in that regard.
	The hon. Member for Bury St. Edmunds asked what capital moneys had been brought forward. Capital moneys for the Serious Organised Crime Agency and the National Police Improvement Agency have been brought forward, and they have been spent on helping with the current economic climate. He asked whether police authorities can apply for the migration moneys that I mentioned. Yes, they can. I want to spend a little time on this issue. We expect the Office for National Statistics to produce estimates of short-term inward migration by this summer, and we want to improve the population data informing the police funding formula debate. The review of the formula gives us an opportunity to try to address some of the issues raised by hon. Members from across the House. That review will enable us from the next comprehensive spending review roundfrom 2011-12to move forward on that basis. That is where our intention lies. Meetings have started to be held on what changes we should be reflecting upon, and this afternoon's debate will help with that debate. All the issues such as how we can better estimate population and the impact of migration will be included in our discussions, as will other matter that have been raised.
	The hon. Member for Peterborough (Mr. Jackson) said that no change had been forthcoming. I know he could not help not being here earlier in the debate, but had he been here he would have heard that from April the migration impact fund will be available in Government offices for the regions; police forces, as well as other local service providers, will be able to apply for money to help them deal with some of the very issues that he raised with regard to Cambridgeshire. Cambridgeshire police authority will be able to go to the Government office for its region to put a case for receiving that money, as will authorities in other parts of the country.

Stewart Jackson: rose

Vernon Coaker: I shall give way, but I have only 10 minutes and I wish to make some other points.

Stewart Jackson: My point was that the Migration Impacts Forum was established 18 months ago, but the information available to Ministers on the flawed methodology used by the ONS and others was available before that. These are current problems from which my local force is suffering, and it was incumbent on Ministers to have acted much more quickly.

Vernon Coaker: It is also incumbent on Ministers to act responsibly. What I have said to the hon. Gentleman is that from April his local police force will be able to apply to the Government office for his region for funding. If we unpick the funding formula in the middle of a CSR round, although his force may get an extra few million, countless other Conservative Back Benchers and Members from all parts of the House will say that the Government have broken their word on what they said they were going to do, which was to provide stable funding for the police service. That is why the Home Office has received limited representation about this funding round and why we have heard more concern about what happens in the next funding roundthat is what the hon. Member for Brecon and Radnorshire (Mr. Williams) was arguing about and it is what most other Members in this debate have discussed. They recognise that if a Government unpick a settlement in the middle of it, that causes instability and chaos. That is why we have not unpicked this one, and why we are not going to do so.

Paul Holmes: rose

Vernon Coaker: I want to carry onI hope the hon. Gentleman does not mind.
	The point of today's debate is that it allows us to inform that funding formula. My right hon. Friend the Member for Leicester, East raised the issue of new technology, and we agree with him on it. He, like the hon. Member for Hornchurch, raised a specific point, and I should like to read out a reply so that I put it accurately. The police portal was a website providing a national communications channel. The main service was to enable the reporting of crime and hate crime online. Good use was made of it, but running costs increased as a result of technical problems. The Association of Chief Police Officers took the view that there was not enough demand to justify the increasing costs, so the scheme was discontinued. QinetiQ's contract was terminated by the NPIA in July 2007. QinetiQ then sued the NPIA and it countersued. These legal matters were resolved in November 2008 in a non-disclosed agreement. Some forces do have online facilities on their website to allow the reporting of crime.

Keith Vaz: I am most grateful to the Minister for telling us that information. How much taxpayers' money was spent on setting up a computer system that was of no use?

Vernon Coaker: To provide the detail that my right hon. Friend requires, over and above the legal opinion that I have just given, I might need to write to him. I will put a copy of that letter in the Library.
	The issue of alcohol was also raised by several hon. Members. We take the need to address that issue seriously and we are taking a range of enforcement measures. The Policing and Crime Bill will allow the Government to establish a mandatory code for the off-trade and for pubs and supermarkets. That will help to tackle the irresponsible promotions and pricing that lead to some of the issues that have been raised by hon. Members.
	The hon. Member for Preseli Pembrokeshire (Mr. Crabb) mentioned Dyfed-Powys force and the important role of volunteers. We all agree that volunteers are particularly important and we need to ensure that we encourage specials and other volunteers.
	The hon. Member for Brecon and Radnorshire raised the issue of the future of the rural policing grant. As we have discussed, that will form part of the review.
	I confirm again to the hon. Member for Reading, East (Mr. Wilson) that the south-east allowances will form part of the discussions with the Police Negotiating Board. I hope that the issue will be resolved as quickly as possible to address the problem of the transfer of officers from neighbouring forces to the Metropolitan police.
	The settlement before us represents a further significant increase in resources for the police services of England and Wales. The latest figures show not a decrease in police numbers, but an increase. In all forces since 1997, there have been significant increases in police officer numbers, and in staff numbers, as well as the introduction of PCSOs. At the same time, we have seen big reductions in crime. That is a record to be proud of and, notwithstanding the difficult economic times, this funding settlement will allow our police services to continue that fine record.
	 Question put and agreed to.
	 Resolved,
	That the Police Grant Report (England and Wales) for 200910 (House of Commons Paper No. 148), which was laid before this House on 21 January, be approved.

Local Government Finance

Mr. Deputy Speaker: For the convenience of the House, we will deal with motions 4 and 5 together for the purposes of debate. We will, of course, put the questions separately at the conclusion of the allocated time.

John Healey: I beg to move,
	That the Limitation of Council Tax and Precepts (Alternative Notional Amounts) Report (England) 2009-10 (House of Commons Paper No. 149), which was laid before this House on 21 January, be approved.

Mr. Deputy Speaker: With this we shall take the following motion:
	That the Local Government Finance Report (England) 2009-10 (House of Commons Paper No. 150), which was laid before this House on 21 January, be approved.

John Healey: We are debating the 2009-10 settlement for local government, the second year of the first ever three-year funding deal for councils. Through the Government's policy on three-year settlements, I have made certain commitments to local government. First, every council in every region will get an increase in its core grant in each of the three years. Secondly, total Government funding for councils in England rose by 4 per cent. this year, will rise by 4.2 per cent. next year and is set to increase by 4.4 per cent. in 2010-11. Thirdly, councils will have more freedom to take local spending decisions. By 2010-11, 5.7 billion a year will have been mainstreamed into funding with no Government funding strings attached. Fourthly, councils will have more certainty about other funding, so in addition to the core grant, I am also confirming today the allocation to councils of 70 other grants from eight different Departments. Most importantly, I have given the commitment not to change my proposals on formula grant distribution, except in entirely exceptional circumstances.
	Local councils therefore know what they will get, and they can plan and manage ahead. The stability that that commitment brings is doubly important in dealing with the economic downturn, which I will come to in a few minutes.

Edward Davey: The Minister mentioned exceptional circumstances. Is he aware that in the royal borough of Kingston, as in many other London boroughs, there was a massive and unexpected increase in demand for primary school reception year places in September 2008, which is expected to be repeated in September 2009 and beyond? The capital allocations, and the revenue to support those places, are simply not available. Will he talk to colleagues in the Department for Children, Schools and Families and argue that this is an exceptional case, and that Kingston and other London boroughs need the support of the Government?

John Healey: In a moment, I shall explain the conclusions that I have come to on whether there are exceptional circumstances in relation to the three-year settlement. I shall also deal with how I expect councils to showand how they are showingthat they can deal with the downturn. I am aware of such representations, not least from London councils, representatives of which I met face to face. Their first point, when I asked them about the apparent impact of the economic downturn on their councils, was that an increasing number of students were coming out of private school education and looking for places in the state school system. That was their top priority.

Edward Davey: The Minister suggested that he was going to answer in terms of the decisions that he has made. We already know that the decisions that he has made will not help the situation. My colleagues and I from all parties around the capital are asking the Government to consider the case of primary school places in London. The change happened before the Government did all the work in preparation for the announcement. Changes within the settlement and the comprehensive spending review need to be made in year. Otherwise, there will be severe problems for many children and families across the capital.

John Healey: One of the principal strengths of a three-year settlement, as well as the additional flexibilities that allow local authorities to identify the priorities or pressures in their area, is that the authorities are given the capacity to manage through that period. For that reason, I have not regarded the representations that I have received on the demand for school places as exceptional circumstances warranting an unpicking of the three-year settlement and undoing the stability and certainty that is at its heart.

Simon Burns: One of the other unfortunate by-products of the current economic downturn is the fact that local authorities such as mine, Chelmsford borough council, are being adversely affected as the fall in interest rates has changed the income that they receive from savings. What advice does the Minister have for local authorities affected in that way? Clearly, the three-year settlement would not have taken that consideration into account.

John Healey: That is one of the points that have been put to me, not least by the Local Government Association, as the hon. Gentleman might expect. The impacts and pressures of the economic downturn do not all go one way. Some costs are down considerably, reserves are up and with inflation set to be lower next year, the quantum of Government grant to local government is likely to go further. There are pressures on local councils, just as there are on central Government, but they do not all go one way. Councils have the capacity to manage their way through this period, not least because they now have a three-year settlement with extra flexibility as part of the funding. They know what they are getting and are able to plan ahead and make some of the difficult decisions that they face.
	In my statement to the House on 26 November, I launched the period of statutory consultation on the local government settlement for next year. That ended on 7 January, and we received 109 written representations from local authorities, local authority groupings and hon. Members. That is the smallest number of representations on the local government finance settlement that anyone can remember. It underlines the seriousness with which local government takes our commitment to a stable three-year settlement and, I think, the seriousness with which local government takes its responsibility to manage within that settlement.

Simon Hughes: I am sorry that I missed the Minister's first words, but I rushed here as soon as I saw that he had started to speak. I think that there might not have been many representations because, with a fixed three-year settlement, local councils might have thought that they would not see much change. Does he accept the case put by inner- London boroughs in the representations that he has received for a better allocation of money for social services and the care of vulnerable younger people? The figure that I have been givenhe can correct me if I am wrongis that last year 370 million was transferred out of London to the rest of the country. While some local authorities now have 99 per cent. of their funding met, boroughs like mine get only two thirds of what they need to look after vulnerable young people.

John Healey: No, I do not agree. This change in the funding formula is based on some detailed work that we published and consulted on several years ago, which formed the basis of the decisions that I took at the beginning of this three-year settlement. Although the same arguments have been made to me by others, I have seen no evidence that the formula is not the best available, or to suggest that the shift in fundingwhich some people say is long overdueis not appropriate for this year and next year.

Stephen Hammond: rose

Simon Hughes: rose

John Healey: The hon. Member for North Southwark and Bermondsey (Simon Hughes) had two bites at the cherry during the debate on the police authority settlement. I shall give him his second bite in this debate, and then give way to the hon. Member for Wimbledon (Stephen Hammond).

Simon Hughes: The Minister for Security, Counter-Terrorism, Crime and Policing was very helpful in response to my second bite at the cherry. He said that he accepted that he would revise the funding formula to take account of new and up-to-date assessments of migration and population figures before the next three-year funding period, at the latest. Will this Minister do the same? He knows the arguments: we think that Ministers do not count the population of boroughs such as mine correctly, as we have many more people than the official figures show.

John Healey: My hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing is always helpful. The hon. Gentleman has just asked a separate and different question, but I can give him the same answer. It is yes, and not least because the national statistician has been leading a taskforce over the past year, with local government intimately and essentially involved. On 24 February, the Office for National Statistics will announce a package of improvements to the population and migration statistics that will give us a better base for calculations for any future financial settlement beyond this three-year period.

Stephen Hammond: I am extremely grateful to the Minister for giving way. He will have noticed that one of the other representations made to him was a joint representation from the chief executive and the leader of Merton council. A continuing problem for many outer-London boroughs and constituencies is that, although we pay our hard-working teachers inner-London rates, we get the outer-London settlement in the local government formula. Has the Minister had a chance to consider the representation from the chief executive and the leader of Merton council? If so, what is his response? Will he consider meeting them, and me, to talk about the problem further?

John Healey: I have not yet considered that representation, or any of the others that we have encouraged from local authorities. The hon. Gentleman's point is linked to our review of the area cost adjustment, which is essentially the mechanism that he and his council's chief executive and leader are concerned about. The way in which it operates is not entirely satisfactory, and we looked at options before striking the present three-year funding deal with councils. We consulted on various changes to the mechanism but none was appropriate at the time, although we are looking hard for the sort of changes that may be appropriate in the future. The work that the hon. Gentleman's council, and others, are doing with departmental officials is extremely valuable, and I and other colleagues in government will take a hard look at it as we prepare the ground for any future finance settlement beyond the current three-year period.

David Burrowes: I am grateful to the Minister for giving way, and I apologise for not being present for the opening of his statement. The concerns expressed by my hon. Friend the Member for Wimbledon (Stephen Hammond) also affect the borough of Enfield. It too is an outer-London borough that welcomes the review of the area cost adjustment, but we need to see the reality of that review before we get to the end of the three-year cycle. Ideally, Enfield council would like to make reductions in council tax, but the fact that the dampening effect takes 5 million out of its hands means that that money cannot be passed on to the taxpayer.

John Healey: I am not sure that the hon. Gentleman's description of damping is quite correct. He might like to recall that it was we who introduced the damping floor into the local government settlement in about 2000. Before that, authorities such as his would face big reductions year on year. They faced volatility that was difficult for them to manage, and that certainly made it difficult for them to plan ahead. If his authority benefits from the floor, I have to say to him that without that floor, his authority would be entitled to a good deal less support for council spending and council services.
	I have taken into account all the representations that we received, including what was said at the meetings that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Tooting (Mr. Khan), and I had with local government groupings. My conclusions from the consultation are that there are no exceptional circumstances of a kind that would justify changing the plans that I announced for the core grant and its distribution in the coming year.
	I have confirmed that the formula grant is set to increase by 780 million, or 2.8 per cent., in 2009-10, and by 747 million, or 2.6 per cent., in 2010-11. The distribution of that formula or core grant to authorities will be as I proposed to the House in November. On top of that, specific and area-based grants take the total increases to 2.97 billion, or 4.2 per cent., next year, and 3.18 billion, or 4.4 per cent., the year after that. It is a tight but fair settlement. It is in line with what I announced in 2007, and every local authority will get an increase in core grant in each year in this three-year period. I am also confirming allocations for 70 other funding streams today, including 43 separate grants from six different Departments, which will be paid in a single sum each month under the new area-based grant systemand central Government have attached no strings, in terms of how local councils decide to spend that money.

Edward Davey: I cannot let the Minister get away with the statement that every council will get an increase. The truth is that local authorities that are on the floor, such as mine, are getting a real-terms cut in their grant. Is he prepared at least to admit that fact on the record?

John Healey: No, because the hon. Gentleman is wrong. There are two points. First, every council will get an increase in each year of the three-year settlementfact. Secondly, without that floor, his authority would get a good deal less this year, and possibly next year. That is how the floor, which the Government introduced to try to help local government through periods of funding formula change, assists his council and a number of others.
	Included in the figures for the area-based grant is the working neighbourhoods fund.

John Howell: Will the Minister give way?

John Healey: Is the hon. Gentleman's point about the working neighbourhoods fund?

John Howell: No, it is on the earlier point.

John Healey: Well, all right.

John Howell: I thank the Minister for giving way. To go back to the amount of the increase, does he not accept that the inflation rate that councils face is not the inflation rate shown by the retail prices index or other statistics, but is instead in excess of 5 per cent.? For example, for many of them, the energy costs of previous years are yet to come through in the bills that they are paying.

John Healey: Actually, some of the significant costs for local authoritiesfuel and, in time, energy costsare going the other way. The pressures and economic trends vary in their effect on local authorities, but it is for local authorities to manage that. It is central Government's job first to give local government a sufficient settlement to enable it to provide the services that people need, and secondly to give it, as far as we can, the stability and predictability to allow it to do its job of deciding how to manage its budgets, including in this economic downturn.
	The working neighbourhoods fund is our 1.5 billion programme to support local councils in getting people back into work in areas that face the most concentrated worklessness and deprivation in England. Hon. Members may know that we had concluded that there were errors in one of the three criteria that we used for eligibilitythe third criterion. Having consulted all authorities on our proposals to revise the third criterion, and having taken into account all the representations that we received, I am today publishing the working neighbourhoods fund allocations for 2009-10 and the indicative allocations for the following year. As a result of these changesI am sorry the hon. Member for Enfield, Southgate (Mr. Burrowes) has left the ChamberEnfield is now fully eligible for the working neighbourhoods fund, as is Lewisham. They will receive their full allocations in 2009-10.
	On the other hand, Brent, Camden, Westminster and West Somerset are no longer eligible for full funding, but I have nevertheless decided that because they have been adversely affected by the revisions to the third criterion, they will receive the special transitional payments that I proposed and set out in the consultation.

Mark Field: It would be churlish of me not to give the Minister some credit, although I suspect that the remonstrations of the hon. Member for Regent's Park and Kensington, North (Ms Buck) carried more weight than mine in the various meetings that took place. When the Minister speaks of the working neighbourhoods fund moneys and mentions a considerable number of London boroughs, is he not concerned that London boroughs are so disproportionately represented, with 24 out of 33 getting the floor of the more general funding? As the effects of the recession are likely to reach London and the south-east more quickly than other parts of the country, there are likely to be substantial problems, such as those that other London Members have raised in the course of the Minister's speech.

John Healey: The hon. Gentleman is right to pay tribute, as I do, to the work of my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck), who made a forceful case. She is very concerned about the most deprived areas of her borough and sees the funding as an important element of supporting those people, as long as the council makes the right decisions in investing in the sort of programmes that will help. However, the hon. Gentleman should not underplay the strength of his own representations. They certainly played a part in the decisions that I reached.
	On the hon. Gentleman's more general point, which takes us back to an exchange during an earlier passage in my speech, the floor is there to assist authorities that would otherwise receive less core grant than they do. I hope he will appreciate that. Moreover, formula grant is part of the total funding that a council will have available each year. As part of their budget planning, councils make their own decisions on council tax levels. In order to judge to some extent whether the core grants that we are providing are a sufficient part for London boroughs such as his, it is important also to look at the council tax levels that his borough and others set.

Ian Liddell-Grainger: I am grateful for the Minister's comments about West Somerset, and I am extremely grateful that the Government have given money back to West Somerset. The council was told about that so close to the time that it had to set the budget that it caused enormous problems in the West Somerset area. Will the Minister consider revisiting the matter? The council will have to go right to the top of the capping level just to try to stand still. I would be grateful for the Minister's comments.

John Healey: First, we are debating the final settlement for next year, so I do not want to give the hon. Gentleman any indication or encouragement that somehow, as a result of his intervention, I intend to reopen or reconsider the matter. Secondly, the circumstances that West Somerset and the other three authorities were left in led me to the decision to propose the special transitional payment. I hope that will help the council manage its way through this period. I am grateful that the hon. Gentleman is nodding assent to that.
	I shall move on and confirm that I am also announcing today the council-by-council allocations of the 100 million from our local authority business growth incentive funding. Those are the final payments of our three-year LABGI scheme, and I am using the same methodology to make the distribution as I did for the payments that we made in June last year. The funds will help local authorities respond to the economic downturn's impact on jobs and businesses in their areas. I propose to consult for a couple of weeks on the calculations and application of the methodology, before releasing payments to councils rapidly afterwards.

Philip Hollobone: I am grateful to the Minister for mentioning that scheme, as 100 million has been held back pending the conclusion of various legal cases. Councils such as my ownKettering borough councilhave benefited from the scheme in the past. Will the Minister confirm whether the grant money will go to district and borough councils, and not to county authorities, or whether it will go to both? Will the funds be used only for the purposes of economic development?

John Healey: The funds will be distributed to authorities, whether county or district, in the same way as in June last year. My answer to his second question is no. One of the values of the scheme for local councils has been that central Government have not attached conditions or funding strings to the money. As I said, the money is available now to deal with the impact of the economic downturn on jobs and businesses in local areas. However, it will be for local councils to decide how best to spend any money that they receive as a result of this announcement and the allocations that I am making today; I hope that they will be able to do that in a matter of weeks.

Edward Davey: I am grateful to the Minister, who is being extremely generous, particularly to me. I welcome the announcement but would like to suggest another way in which he can help small businesses across the country immediately. The Government should consider how to make the small business rate relief automatic. Many businesses are not aware of the relief and pay business rate bills far higher than they should.

John Healey: Small business rate relief is a valuable scheme that we introduced relatively recently; it probably benefits about 400,000 small firms across the country. It is for the local authorities, as the billing authorities, to promote the scheme. Back in September, I wrote to them reminding them of that and urging them to do so. Making the relief automatic is not straightforward, not least because there is a difficulty in ensuring that the person liable to pay business rates on one property does not have a string of similar properties, thereby breaching the eligibility criteria for claiming the relief.
	However, I recognise that people are making the hon. Gentleman's argument at present, and there are things that we have done and can do to make the scheme better. Last year, we simplified the administration arrangements for it and we are now changing the eligibility that allows people to claim the relief back to the beginning of the financial year; that will come into play in April this coming year.

Julia Goldsworthy: rose

John Healey: I shall give way, but then I want to move on to discuss concessionary bus travel.

Julia Goldsworthy: The issue of small business rate relief and whether it should be made automatic has already been raised. Can the Minister do anything else to provide support? Other things that would greatly help small businesses could be done. Can he do anything further to help raise awareness?

John Healey: I am open to suggestions. I have written not only to all local authorities, but to business organisations. I have encouraged them to ensure that they do all that they can through their networks, local groups and membership to promote the scheme and its availability, and I hope that that will also help with take-up in future.
	I noticed that I whetted the appetite of some hon. Members by mentioning concessionary bus travel.  [ Interruption. ] If the hon. Member for East Worthing and Shoreham (Tim Loughton) wants to intervene, of course he can; or perhaps we can look forward to a speech from him. Funding for free bus travel for 11 million pensioners and disabled people continues to be delivered through two routes: the core grant and the special grant that local authorities requested for last year and the coming year. There is no evidence that the total amount of additional funding that central Government are putting in to support this new entitlement, which we are keen for people to have, is not enough, although some authorities have argued for a change in its distribution. I understand their argument, but I have to say that any change would upset the three-year funding certainty of the settlement. I also have to say that there is no guarantee that any alternative allocation would match needs better than the current one.

Tim Loughton: The Minister mentioned people being upset. My constituents are exceedingly upset, for the second year running. He will remember that, over Christmas and the new year, he kindly received a delegation of councillors and chief executives from my constituency. At that stage, Worthing council faced a deficit of more than 600,000 and eight of my other local councils faced deficits of almost 250,000big hits that will mean big increases in council tax or cuts in services. We have just heard that, this year, Worthing is going to suffer a deficit in excess of 500,000 on top of that, despite assurances from one of his colleagues that they would reconsider the formula by which these figures were decided. Although I do not dispute that the overall figure for the scheme nationally may be sufficient, in the case of my two local councils and others in my part of the country it is woefully insufficient and is having a serious impact on their finances.

John Healey: I well remember the meeting with Worthing council. I remember, too, that the figures that were set before me were essentially predictions and modelling about which nobody could be entirely certain, not least because of two main factors: first, how people respond to the fact that they can now travel for free anywhere they like on local buses; and secondly, the significant variations in how tough and effective councils have been in negotiating their contracts with local bus operators. If the hon. Gentleman wishes to send me updated figures that are based on actual spend and cost, I will be interested to look at them. However, it is now clear that moving administration of the free bus travel scheme to county level instead of leaving it in the hands of district councils such as his own will help to iron out some of these funding wrinkles. I can confirm to the House that the Government plan to consult on such a move within the next few weeks.

Alistair Burt: I want to probe the Minister's suggestion that studies were being done to work out the public's response to the availability of more free travel. Presumably after millions of pounds-worth of consultants, he found that more people might take advantage of free travel. Is there any more to be got out of the studies other than that basic fact and beyond trying to work out exactly where people are travelling?

John Healey: We do not need studies, because we can look at what has happened during the course of this year. The hon. Gentleman refers to studies; I was referring to modelling that local government had commissioned to try to argue the case with central Government. Of course, one of the main results of the free entitlement is that more people travel on buses. That is why this year central Government are putting an extra 212 million into the concessionary travel pot to ensure that we can cover the extra costs for the extra entitlement that people now have to travel free on buses not only within their local council area but anywhere that they choose.
	There was strong support in the consultation for three-year settlements; I keep coming back to that. That applies particularly in such economic times, because it gives local government the stability and certainty that it needs to plan and manage its budgets effectively. That, combined with an extra 8.9 billion over three years, and moving 5.7 billion into general grants that are not ring-fenced, allows councils to spend money on what matters most to local people.
	A number of councillors commented on the pressures that they faced due to declining income or increasing demand on services. To help deal with the extra work load for housing and council tax benefit services, we have now confirmed that an extra 45 million will be distributed to councils on a monthly basis during 2009-10, using the existing administration subsidy distribution formula.
	I also recognise the concerns of local authorities that have made investments in Icelandic banks. They have money that is clearly at risk, but it is not lost, and I want to help to minimise the problems for those authorities. Having completed the consultation on draft regulations that I promised the House in November, I will shortly lay them before the House so that they can come into effect in this financial year. The regulations will mean that the possible losses from Icelandic banks will not affect council budgets or council tax levels during the next year. Representations have been made to me by some authorities about the position of passenger transport executives, which would not be covered by the change in regulations I have proposed. Those are subject to a separate and more flexible financial regime, and unlike local authorities, they are already able to spread revenue costs between years without any Government action being needed.
	Like everyone else, however, councils are now making hard budgetary decisions, and while the year ahead will be tough for many people, they need their council to provide services that they can rely on, and they need it to keep council tax down. In December, the Audit Commission published its report Crunch time?, which confirmed that councils are generally prepared for the impact that this downturn will have on local services, and that their efforts to find efficiency savings will ensure value for money and minimise the impact on their budgets and communities.
	As I said, however, the economic pressures are not all one way. With the expected fall in inflation next year, Government grants will go further. Some council costs are already down, reserves are up and borrowing is cheaper. Keeping council tax down and maintaining improvements in services means being continually more efficient, and low tax does not have to mean service cuts. About a fortnight ago, I visited Newham, Greenwich and Hackney, and saw that it is possible to make that equation add up. In each of those three boroughs, I saw service improvements and further investment at the same time as council tax was frozen. Councils must strive to make every penny of public money go as far as it can. When everyone is tightening their belt, people expect councils to do the same.

Ronnie Campbell: Not everyone is capable of taking that advice. I am thinking of Northumberland where the Liberals are in charge, and they have just decided to increase their allowances by 40 per cent.

John Healey: My hon. Friend knows well enough that decisions about allowances for council members and decisions on employees' salaries are rightly matters for local government itself. I know that he will not agree with this, but I shall say it to him anyway. There are particular problems and financial pressures in Northumberland, some of which derive from the inheritance the new unitary council is taking on from the district authorities. In Northumberland, as in the other eight areas where new unitary councils will come into place in April, the scope to manage difficult economic pressures is much greater than it is for those councils that are continuing without such restructuring and reorganisation.

Ronnie Campbell: The Minister did not say that when people came along with their gold-plated services and an 18 million saving so that they could get a single-status authority in Northumberland. Everything seemed to be rosy, and that was only last year. What has changed?

John Healey: I am keeping a close eye, not least because my hon. Friend is ensuring that I do, on preparations for the new unitary authority in Northumberland and particularly on its finances. From everything that I have seen and been told, the new council is set to make a saving not quite of 18 million but of the 17 million-odd that it anticipated as part of the restructuring. It will also have to make almost 10 million of additional savings as a result of the legacies that have been passed to it by the combination of districts in its areas. Those are tough decisions for it to take, but I am confident that it will be up and running with its services in place by 1 April, and that it will make the necessary financial decisions in circumstances that I accept are difficult both in Northumberland and generally. All local councils face those decisions.

Bob Neill: Anxious as I know the Minister always is to learn from experience, particularly in relation to unitary authorities, and given his concern about the reliability of modelling and calculations, will he undertake to review the modelling that his Department used to calculate both the transitional costs and savings in relation to the new unitary authorities? He will recall that it was called into question by a number of academic sources, so will he undertake to review it in the light of the actual figures?

John Healey: I am surprised at the hon. Gentleman. The Department did no modelling of the financial changes. It looked very hard, using external financial expertise, at the modelling and financial figures submitted by those proposing unitary government. We debated in the House the financial elements of each change to which Parliament gave the go-ahead.

Bob Neill: rose

John Healey: I am conscious of the time, and a number of Members wish to speak, so I shall continue.
	In line with the rest of the public sector, we expect councils to achieve at least 3 per cent. efficiencies every year. That means smarter procurement, better management of their assets, reorganising how the organisation works, sharing more services and collaborating more with public, private and third-sector organisations. In doing that, they cannot count cutting public services as efficiency savings. The rules in our guidance make it clear that any steps to make efficiencies must maintain or improve the quality of local services.

Mark Field: The Minister mentions smart procurement. How does he believe that will be achieved, particularly when central Government Departments have more than 100,000 different supplier contracts, often with duplications across or within Departments? How can he say that he will promote smarter procurement when central Government have so palpably failed to achieve that goal?

John Healey: Because local government is capable of achieving things that central Government do not find easy to achieve in some cases, and because leading councils are already doing each of the things that I have said that all councils need to consider much more seriously.

Julia Goldsworthy: Will the Minister give way?

John Healey: I give way to the hon. Lady one more time, then I shall move to a conclusion.

Julia Goldsworthy: On smart procurement, a lot of small businesses have complained to me that they find it difficult to take part on a level playing field when initial interest is expressed, because not enough detail is provided. Does the Minister agree that smart procurement can also mean making it easier for consortiums of smaller local businesses to take part in that process?

John Healey: Indeed. I accept and agree with the hon. Lady's points.
	The efficiency challenge for councils means that they need to find more than 1.5 billion in new savings every year. To put that into perspective, it is worth 90 off the average band D council tax bill. For this year, councils are forecasting around 1.1 billion of new savings, which is similar to those that they have achieved each year in recent years, but it is clearly not good enough now, and councils must do more.
	I believe that council tax payers should be able to see and challenge the value for money that their local authorities provide. Therefore, from this year, I will require councils to put on council tax bills standard information about the efficiency gains that they are making, and to give further detail in the accompanying leaflets.

Bob Neill: Can the Minister help me with two points? Will he publish the assessment of the costs that local authorities will incur? In an endeavour to lead by example, will he liaise with the Chancellor of the Exchequer to ensure that each income tax and other tax demand contains a list of all the efficiencies that all Departments achieved?

John Healey: There are all sorts of ways in which the efficiencies that Departments achieve are available for public scrutiny, as well as debate in the House. It will not surprise the hon. Gentleman to learn that the cost of such changes to council tax bills are relatively marginal and that I took them into account when reaching the decision.
	Let me say something about council tax and capping, which, I know, will be unpopular and unwelcome in local government. We acted to protect council tax payers from excessive increases this year, and I will not hesitate to take tough action again, including requiring rebilling, if it is necessary to protect council tax payers next year. A combination of inflation-busting increases, which we have provided every year since 1997, in the Government grant to local government, and the threat of council tax capping produced this year the second lowest ever increase in council tax. At this time of economic downturn, councils should do everything in their power to keep council tax bills down and leave more money in people's pockets.
	When I came to the job of Minister for Local Government 20 months ago [Interruption.] I missed that sharp comment from my right hon. Friend the Member for Makerfield (Mr. McCartney). I do not know whether he would like to repeat itif I missed it, the Official Reporters may have found it difficult to follow, too.

Ian McCartney: I thank my right hon. Friend and comrade for giving way and apologise for making a joke at his expense. I said that when he came to the job, he had some hair.

John Healey: Many of us wish we could turn the clock back in so many ways. However, I do not regret my good fortune in taking on the job. When I did, local government was asking for greater certainty, stability, equity and flexibility in funding for local councils. With the three-year settlement, that is exactly what they got this year, and they will have it next year, too.
	I know that the economic downturn is difficult for local authorities, just as it is for central Government. Some significant costs are coming down, council reserves are up, and local government has a good track record to date on efficiency. The Local Government Association is confident that councils are up for the challenge of providing the services that people need at affordable cost. I, too, am confident that the settlement will enable councils to do that. I commend it to the House.

Bob Neill: I thank the Minister, as I always do, for his care and attention in outlining the Government's proposals and the invariable courtesy that he shows the House in taking several interventions. That said, in some respects, the Minister's very reasonableness makes him a dangerous man because that reasonableness masks an indefensible case, which bears little detailed examination.
	Let us start, however, where the Minister and I agree. He is right that the three-year settlement is welcome. It is welcome right across the piecewe on the Conservative Benches welcomed it, as did the Local Government Associationand it makes good sense. He is perfectly right that the settlement gives certainty. It is implicit in what he said, although the Local Government Association would appreciate confirmation, that excepting some cataclysmic circumstance, he anticipates that the net third year will remain unchanged. Confirmation of that point would give the LGA the certainty that it wishes forand I see that the Minister nods.
	The downside is that the LGA knows that the settlement is bad news. Indeed, in addition to welcoming the certainty of a three-year process, the LGA said that this three-year settlement was the worst settlement that local councils had had in decades. To that extent, the Minister was right when he said that the statement back in November does what it says on the tin, but it was not very good news for local councils and local council tax payers.

John Healey: The hon. Gentleman has taken me a little by surprise. Could he point out for us where the Local Government Association has said that this settlement is the worst settlement in decades? If it has, I must have missed it.

Bob Neill: Yes, I will happily send the Minister the detail from the appropriate statement. I might add that I made the same comment, which he did not challenge, back in November, so nothing has changed in that respect since then.
	It is also significantthe Minister will recognise thisthat although we are in the middle of the three-year period, a lot has changed since the beginning of that period. Indeed, a lot has changed since November, and it has changed for the worse. The economic climate in which councils have to operate and in which council tax payers have to live has deteriorated. There is no getting away from the fact that that deterioration is the consequence of this Government's policies. The Minister is certainly consistent in his figuresI recognise thatso let me do him the compliment of being consistent in the judgment that my hon. Friends and I make about his statement. The settlement was a bad settlement for council tax payers in NovemberI think I used the phrase a thoroughly bad settlementand it remains a thoroughly bad settlement for the rest of the three-year period.

Ian McCartney: I thank little Tory for giving way to little Labour. The hon. Gentleman's party mantra is to cut public expenditure substantially. That was confirmed again in a debate on the economy earlier this week. If we are talking about the worst settlement in decades, can he tell us what further increases he is saying that the Conservative party would put back into local government?

Bob Neill: I will look the right hon. Gentleman straight in the eye, as I think I canat least we have both retained our hair in our political careersand say that the Minister answered that question when he said that efficiency and lower tax need not mean cuts in services. The Minister was right; indeed, Mayor Johnson in London and Conservative councils such as Hammersmith and Fulham are demonstrating precisely that point. However, it is perfectly reasonable for us to point out, in a spirit of constructive opposition, the concern that, even within the envelope of whatever settlement may be reached, there are areas where the system fails or does not work properly. However, I will turn to that point in a few moments, if hon. Members will bear with me.
	The effect of the figures that we haveI hope that Government Members will remember thisconfirms what was said in the debate in November. The Minister talks about the record levels of grant given to local authorities. The reality, however, is that council tax, which is the bottom line that most individuals and families are concerned about, will have doubled under this Governmentthat is, it will have doubled for families who are harder pressed than they have been in many years. The figures, which have never been disputed, are as follows. From 1997-98, the first full financial year under this Government, through to this year, 2008-09, a band D council tax billthe standard measure normally used by the Government and all independent observerswill have increased from 688 to 1,374. The Minister said that he wanted to act on evidence and facts, and there we have incontrovertible evidence and facts.
	Against that background, the Minister will know that the chairman of the Local Government Association wrote this year to say that the association anticipated that council tax increases would be about 3.5 per cent. on top of that rise. The reality is that such increases are well beyond inflation, as the Minister himself concedes. Why is this happening? It is not through a lack of effort by the local authorities. It is because, at the end of the day, the funding settlement has not kept pace with the rising costs that bear down particularly heavily on local government. The Minister is a sensitive man, and he knows that the rise in council tax has repeatedly been flagged up in opinion polls and other evidence as one of the most significant concerns identified by individuals and families. This settlement makes things worse. If the Government want to have a joined-up set of policies, this is not the way to do it.
	This remorseless rise in council tax makes nonsense of the supposed fiscal stimulus that we saw introduced before Christmas. The anticipated 3.5 per cent. increase is actually less than the Government's anticipated figure of 4.5 per cent., which was hidden away in the small print of the pre-Budget report. It is thanks to local government, not the Government, that that figure is coming down. A 3.5 per cent. increase would take band D council tax bills up to about 120 a month by April, and that would eat up much of the so-called spending power that the Government said they were putting back into people's pockets. They are giving with one hand and taking back with the other.

Tim Loughton: Does my hon. Friend also recognise that particular parts of the population have been hit disproportionately hard, not least pensioners in constituencies such as mine? About a third of the increase in their pension has been gobbled up automatically by the rise in council taxes, and they do not have an income that can rise to compensate. There is a double whammy, in that pensioners with meagre savings are now receiving lessif anyinterest on those savings to make up the shortfall. Those people are suffering a real-terms decrease in their living standards.

Bob Neill: I am grateful to my hon. Friend for making that very cogent point. I have come across such circumstances in my constituency, as have many other Members in theirs.
	The injustice being done to those pensioners is compounded by the complexities and difficulties that many of them face when negotiating their way through the system to claim council tax benefit. That is getting harder and harder, as I know from constituents and members of my own family who have negotiated their way through the system. The consequence is that, under this Government, the number of eligible pensioners taking up council tax benefit has fallen from about three quarters to a half. That is scarcely a record to be proud of, which, with respect to the Minister, makes it all the more ironic that he should say that the Government want local authorities to flag up efficiency savings on council tax bills. A little bit of flagging up of the Government's inefficiency in handling the council tax benefit regime might redress the balance somewhat.
	Those problems are compounded yet further. As the Minister knows, some of his cover was blown in the November debate. If we look at page 203 of the pre-Budget reporta document that no one in the Government has so far sought to disavowwe see that, in addition to above-inflation increases in council tax this year, which come on top of the doubling of council tax during the past 10 years of this Government, the report postulates a further council tax rise of 10.7 per cent. over the following two years2011 and 2012. That additional 10.7 per cent. increase is postulated in the same pre-Budget report that postulates that retail prices index inflation will slip into a negative figure, giving a deflationary figure of minus 2.25 per cent. over that same period. If we put the two figures together, we can see the reality of the whammy that is going to hit people over that period.

Daniel Rogerson: The hon. Gentleman is very generous; he said that the Minister was being very reasonable because he was covering up for various unpopular aspects, and I think that the hon. Gentleman is being very reasonable because he is covering up for the fact that not a great deal is there in the way of an alternative. I would be interested to hear about the Conservative party's position on council tax and its long-term position on local taxation. What big difference would his party make?

Bob Neill: As I never like to disappoint the hon. Gentleman, who I know wants to get back home to the family in Cornwallquite rightly in this bad weather and when he has a young babyI will make a bit of my speech out of context especially for him, so he can hear it now. We have a very clear alternative, as we would assist local councils and work with them over the first two years of a Conservative Government to freeze their council tax. If they can keep their increases down to 2.5 per cent., we would match-fund them by taking moneys from central Government budgets to freeze the bottom line to their council tax payers. That is a very positive alternative.

Edward Vaizey: Does my hon. Friend agree that the reaction of Labour and Liberal Democrat-controlled councils to that policy was absolutely outrageous, as they effectively said that they would not come to the table to help keep council tax low for their council tax payers?

Bob Neill: My hon. Friend is absolutely right. That gives the lie to the weasel words we hear from other parties about their desire to protect council tax payers. There is only one sensible way to do that, and I urgently hope that councils of all political persuasions will, despite the difficult hand that the Government have dealt them, do their level best to keep council tax down and below inflation, where possible, in the knowledge that in due course we will work with them to freeze it. It is the bottom line that counts to hard-pressed people.

David Wright: We all want to keep council tax down. Will the hon. Gentleman publish a list of Conservative council leaders who have signed up to this two-year commitment, and will he do so today?

Bob Neill: Funnily enough, and unhappily, I do not carry such a list with me on my mobile word processor. If the hon. Gentleman is patient, however, he will find out not only about the commitments that have been made, but about the local authorities that are already working to cut tax. Indeed, some local authorities such as Kensington and Chelsea have already announced a 50 efficiency bonus; some, such as Hammersmith and Fulham, have announced a 3 per cent. reduction; and the largest levier in the country, the Mayor of London, has announced a freeze. Action has already been delivered.

Edward Vaizey: It might take me rather more than a day to produce it, but I would happily send the hon. Member for Telford (David Wright) a list of Labour council leaders who have been turfed out by their electorates for consistently raising council tax. We could start with Ken Livingstone, although he is not technically a council leader, and the leader of Hammersmith and Fulham council.

Bob Neill: My hon. Friend is absolutely right. Of course I welcome the Minister's recognition of the hard work done by local authorities and their efforts to achieve efficiencies, but I am sure that he would want to be as reasonable and generous as he always is by acknowledging that that has happened largely because those authorities are now under Conservative party control. It is thanks to the Conservatives that it is happening.

Paul Truswell: rose

Bob Neill: Perhaps something I said has made the hon. Gentleman wish to intervene. I happily give way to him.

Paul Truswell: The hon. Gentleman is most gracious. A recent independent inspection of adult services provided by Leeds city council, which the hon. Gentleman probably knows is now controlled by a coalition of Conservatives and Liberal Democrats, saw those services downgraded to an inadequate one-star rating. Does he understand the concern that this council, under his Conservative colleagues, is now cutting grants to community care schemes for older peoplePudsey Live at Home, Horsforth Live at Home, Farsley Live at Home and Aireborough voluntary services to elderly and disabled people, for examplethat are provided by voluntary organisations? Is that the sort of approach locally that the hon. Gentleman and the right hon. Member for Witney (Mr. Cameron) are encouraging Conservative councils to take?

Bob Neill: I am well aware of the financial mess that the joint administration in Leeds inherited from its predecessor; it is endeavouring to sort it out. I suggest to the hon. Gentleman that some restructuring is necessary to take that forward, but it is the people on the ground who are close to their communities that are best able to decide on these issues. It is the local communities that passed judgment on the previous Labour administration, and it was that administration that got us into the situation in the first place. I hear what the hon. Gentleman says, but I will take no lectures from him on that matter.

Alistair Burt: While we are on this point and enjoying this happy interlude, let me say that one figure that my hon. Friend might carry around with him is the number of councils on which the Labour party is simply not represented at all on account of its past conduct. I think that it is more than 100, but my hon. Friend may have the right number. Does that not show what the electorate think of the hon. Member for Pudsey (Mr. Truswell) and his colleagues in respect of local government over recent years?

Bob Neill: I suspect that my hon. Friend is right, although I must confess that I did not have time to look up the exact figure. It tends to change pretty regularly. I am reminded of Western films in which there is a sign saying something like Deadwood Gulch, population 152, and in which people strike the figure out and write 153 if they hear a baby cry, and if they hear a gunshot they strike it out and write 151. In much the same way, the figure for the number of Labour councillors is struck out on a fairly regular basis. That is the ultimate passing of judgment.

Paul Truswell: rose

Bob Neill: Things are becoming very lively. I will happily give way to the hon. Gentleman.

Paul Truswell: The hon. Gentleman is most entertaining and most gracious, but may I return him to reality? In recent years, when electoral trends have been running against the Labour party nationally and in local government, Labour has made gains in Leeds. The Liberal Democrat-Tory coalition running the city council has made no gains. Does that not prove that what he is saying is nonsense?

Bob Neill: There were times when one of the taunts from the Labour party was that there was no Conservative representation in the big cities of the north. In Leeds, Bradford and other such cities, that is no longer the case. With respect to the hon. Gentleman, he knows how these things ebb and flow-

Mr. Deputy Speaker: Order. Much as everyone is enjoying this interlude, I think it would be a good idea if we now returned to the matters in hand.

Bob Neill: I am always happy to be guided by you, Mr. Deputy Speaker.
	What is apparent from this exchange is Labour Members' sensitivity on the topic that we are discussing. The simple fact is that it is local government that is the most efficient part of the public sector and local government that is delivering the best to people, and it is central Government who are dealing local government an increasingly tough hand. I am afraid that, with all respect to the Minister, the settlement that he has confirmed today makes that position no better.
	The cumulative effect of the increases predicted in the PSBR document, which has not been sufficiently recognised by the public, leads me to revise one of my judgments. In November I said that this was a council tax bombshell, but I was wrong: if the Government were returned at the next general election, it would be a council tax bombardment that would continue for a number of years.
	Let me take the Minister up on another point. We have referred to the LGA's concerns about the settlement. The Minister used a formulation that he has used on a number of other occasions when he said that the grant was being increased by 4.2 per cent. He is clever with words, butI say this with every respect to himhe will know that that is not quite how it works in practice. The 4.2 per cent. is the figure for all grants, but within that is the dedicated schools grant of about 30 billion, which completely skews the figure. It is a huge sum over which local authorities have no discretion. If we take that figure out and look at the formula grant, which does give local authorities some ability to respond to changing circumstances, we are down to 2.8 per cent. That is why many local authorities are saying that the figure does not reflect the costs being imposed on them, even in the current deflationary environment. They are currently tied into contracts and other costs that arose at an earlier stage.

John Healey: The hon. Gentleman has given a figure of 2.8 per cent., but his own party's commitmentthe commitment of its shadow Chancellor and leaderis to a rise of 1 per cent. A gap of 240 million, not at some time far in the future but eight weeks from now, is what councils would be facing if the Conservative party were in power rather than us.

Bob Neill: Not surprisingly, the Minister has not described the Conservative party's policy accurately. In fact, as he knows, that the Government have been a little economical with the actualit. The 4.2 per cent. figure is the convenient figure that the Minister will always use, but local authorities of all political persuasions, including the cross-party Local Government Association, maintain that 2.8 per cent. is the real figure. They also point out that including the dedicated schools grant is not an accurate means of assessing discretionary spend. The Minister has done that for obvious reasons, given his position, but it does not give us the whole picture.
	Can I also just point out to the Minister the second area of concern here? He makes something of having increased the amount of non-ring-fenced grant, but at the end of the day, that is still just a drop in the ocean; some 36 billion of the special grant remains ring-fenced. The bulk of it is still ring-fenced, so the amount of leeway for local authorities has eased a little, but not very much in the overall scheme of things. We are pledged to look at this again. Far too much of the expenditure outside dedicated schools grant is ring-fenced, and that gets in the way of local authorities' ability to take appropriate decisions for their localities.

Neil Turner: I am a little confused, and I wonder whether the hon. Gentleman can shed some light. Would a future Conservative Government give more money to local government in the support grant than the current Government are planning to give? That is a simple question and, despite all that he has said, I am totally at sea as to whether the answer is yes or no.

Bob Neill: I understand the hon. Gentleman's difficulty; he is probably as shell-shocked as I am that Wigan and West Ham United are in their current positions in the premiership. The Conservative position could not be clearer: we have spelled out that, for the first two full years of a Conservative Government, we will protect the interests of council tax payers by making a commitment that if a local authority is able to get its council tax increase under 2.5 per cent. we will match-fund it. We will, of course, work through the mechanisms by which we get to that, but that is the commitment, and it is plain enough. I will shortly come on to what we might need to do in future about a system that is increasingly creaking at the seams.

Mark Field: I am glad that my hon. Friend will now move on to addressing the future, as so far there has been a lot of banter, too much of which has looked back to the past. What would an incoming Conservative Government do in relation to the ongoing long-standing concerns that many Members, particularly those representing inner-city seats, have had about population statistics and the great inadequacies that have been built into the system in the past 10 years? Does my hon. Friend have some plans for ensuring that that concern is resolved?

Bob Neill: I suggest to my hon. Friend that there are some solutions here. The Minister's review is welcome in so far as it goes; nobody would dispute that. However, many of us would say that it has been a long time in coming, because these issues have been raised by Members on both sides of the Housethe hon. Member for Slough (Fiona Mactaggart) attended an earlier debate, and she has raised it on a number of occasions. We need to bring this matter to a head.
	There are things that could be done. There is a broad point about the way in which the formula grant is calculated and distributed. The criteria, the operation and the various indices that give rise to the distribution of the grant, whatever its overall size, to individual local authorities have become so opaque and unreliable that it no longer has credibility either with the professionals or the general public. The persistent use of significantly out-of-date population data is one very glaring example, although it is not the only one; several authorities have raised concerns about the fact that it is possible to interpret the deprivation indices in a number of different ways that produce different outcomes for local authorities.
	We ought to be doing two things. First, perhaps we should move to a system in which the criteria for the distribution of the grant are no longer set entirely within the Department without reference to any independent body. Australia has an independent grants commission, which plays a role. Ultimately, there must be parliamentary accountability, of course, but that is an interesting model. It would be perfectly plausible to charge such a body with a statutory duty to review and update the statistical information. Under the current system, the Government could, if they wanted, choose not to rely on the outdated census statistics, but to take on board a vast array of more up-to-date data, such as national insurance registrations and school registrations. Westminster council, in the constituency of my hon. Friend the Member for Cities of London and Westminster (Mr. Field), has collected and put forward such data to Ministers. The Government could change the information, even in the current system, but we could find an even better means of embedding it. The Government could act on those updated figures now, because that would require only a change to the regulatory environment, which could easily be achieved. That is the solution.

Julia Goldsworthy: The hon. Member for Cities of London and Westminster (Mr. Field) raised the problem that this matter poses for inner-city areas. Does the hon. Member for Bromley and Chislehurst (Robert Neill) agree that it also poses problems for more rural areas, which may contain a large number of seasonal migrant workers and so demands may vary within the year? There also is scope for huge demographic change because of other reasons. For example, in my constituency, the growth of a higher education institute has resulted in the 18-to-24 population increasing by 80 per cent. in just three years. The funding formula struggles to deal with all these things.

Bob Neill: The hon. Lady is right, and her point demonstrates the urgency of the situation. I am glad that the Minister is taking this point on board, because many of us felt that when the Treasury was leading in this area it had a continuing reluctance to come to grips with the inadequacies of the situation. She is right to say that the problem applies across all types of authority, regardless of political or geographical circumstances. I hope that the Minister will come back urgently with the review. We will be constructive about that, but it may be necessary to go further

Neil Turner: Will the hon. Gentleman give way?

Bob Neill: I have been pretty generous so far, so the hon. Gentleman will understand that I now want to make some progress.
	All of what I have said comes back to a suggestion that the grant system is creaking to the extent that it is no longer credible. The other evidence of that can be seen in the floor system. The Minister makes the point about the protection of floors, but, in reality, when the floor system reaches a stage when about one third of all the larger authorities are on the floor, when about 24 out of the 33 London boroughs are on the floor, and when a range of types of authorities and about 40 per cent. of district councils are on a worse floor0.5 per cent., as opposed to 1.75 per cent.something perverse is happening. It leads me to conclude that the system has gone beyond its useful life and that we need a much more significant and thoroughgoing reform as to how distribution takes place.
	I noted, too, what the Minister said about looking at the operation of the area cost adjustments. I would welcome that, and again, I hope that he will use his good offices to inject some urgency into the matter, because it has been raised over a long time. It is not just about the operation of the grants for which his Department is responsible; one of the concerns that he will know has been raised both by the Local Government Association and by London councils is the lack of consistency between various Departments in the application of the ACAs. I hope that he will take that on board as a central point of the review, because I am sure that with political good will, consistency could be achieved swiftly.
	My final point about the inadequacies of the grant formula relates to the peculiar results for local authorities of similar size and in similar, neighbouring areas. Let us consider a discrepancy in the formula grant in the west midlands. Solihull has a population of 205,000 and receives 53 million. Walsall has a population of 253,000. I accept that it has some other social problems, so one might expect a difference, but it receives 133 million, so the leap is so great as to be beyond credibility. The same applies closer to home for me, in the London boroughs. Bromley has a population of 300,000 and it receives 64 million. The next-door borough of Croydon has a population of 340,000, so it should get a bit morebut it receives 116 million, so there is a huge difference. Those apparently perverse outcomes cause people to question the way in which this system works in practice. With respect, I must say that those issues have not been addressed by the statement that has been made, because they relate to systemic problems that the Government could have dealt with, but have not dealt with over a period of time. That leads to suggestions that there is a degree of unjustified subjectivity in the operation of the system, and that needs to be dealt with if people are to have confidence for the future.
	The net result of all that is that burdens on the council tax payers remain. The Minister talks about the desire to reduce them, but we did not go too much into the costs of operating what remains an over-intrusive inspection and targets regime. We are told that we should be grateful that the new regime has reduced the number of national indicator sets to 198 or 195, but that is still a huge amount and far greater than is necessary. That amount still involves real costs for local authorities. The need to tick the boxes still forces distortions on local authorities. If the Minister is serious about giving freedom to local authorities, as I hope he is, he could cut back further on that distorting inspection and targets regime.
	If we are to achieve what is required for local authorities and council tax payers, we will need to give them more leeway than the Government have given them. I hope that Ministers consider that point for the remaining year, although I honestly do not think that they will be in a position to do so for the next three-year spending round. The bottom line is that people are now really hard pressed. Local authorities are doing their best, but sadly their job is being made harder by what is happening. I hope that, as a matter of urgency, local authorities will do all that they can to minimise the rise in council tax, despite the rotten hand that they have been dealt. We will work with them constructively. I am sorry that, for all the fine words from the Minister, the settlement will not give local authorities the constructive tools that they need to deliver as they wish for their communities.

Neil Turner: I welcome the settlementin the circumstances, it is an extremely good settlement for local government. It is as well to put on record the fact that this three-year settlement and the stability it provides are very important to local government. We will look back on it as a major reform by the Government that will continue to work in the future. Personally, I think that it should be a rolling settlement, so that in a three-year block we would have a two-year settlement with indicative figures for the third year, and in the third year the cycle started again. That is a refinement that we can work on in the future.
	It is worth recalling that in the years since 1997 every local authority has had a cash increase in the amount they receive from Government. When you remember what was happening in the late 1980s and early 1990s, you see that there is a phenomenal difference. I cannot understand how the Local Government Association can say that this is the worst settlement in decades. It clearly does not remember what happened in the 1980s and 1990s, when my local authority in Wigan experienced cuts not only in real termsbelow inflation levelsbut in cash terms. The money we received from the Government was cut by 6 million, 7 million or even 10 million year after year under the Conservatives. How the LGAnow Conservative ledcan claim that that was better than what we are getting now is beyond me.

Edward Vaizey: My difficulty when Labour Members talk about cash increases for local government is that they never talk about the additional burdens. Ministers love coming to the House and announcing initiatives to provide free services such as swimming or culture, but they never explain that local councils will have to pick up the bill.

Neil Turner: There will always be such changes, and it is right to strike a balance between what local government has to paythrough the local council tax payer who will receive the servicesand what the Government give in grant. The point that you did not address is that when the Conservative Government were in power, my local authority received less cash, not just below-inflation increases. The hon. Member for Bromley and Chislehurst (Robert Neill) was challenged not once but twice about what the Conservative party, were it in power, would do about grants to local government, but he could not make any commitment to more cash for local government from a Conservative Government. We had some weasel words about matching increases of under 2.5 per cent., but he could not commit to a cash increase across the board.

Alistair Burt: The hon. Gentleman did not address the significant point made by my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), which was that the Government tell local authorities what new services they are going to deliver and then put the extra costs on to the shoulders of local council tax payers, who do not get the choice one way or the other. That is the problem with the Government's handling of the situation.
	Secondly, I was the Minister responsible for the city challenge in Wigan during the 1990s, which brought millions of pounds for regeneration in Wigan and changed the face of Wigan. I would have thought that as well as discussing what happened in local government the hon. Gentleman might have made some reference to that initiative of Michael Heseltine's, which made such a difference to Wigan and the surrounding area and put it on course for its present prosperity and all the good things that have happened since.

Neil Turner: I would have some sympathy with that point if, at the same time, you had not been cutting all our mines and other industry and making the economy of Wigan, in a particularly short period of time, hugely difficult for us. It is only because we had an extremely good local authority, led by Councillor Peter Smithnow Lord Smiththat we could help the local economy following the devastation left by the closure of the pits. I accept that the city challenge made a differenceof course it didbut that does not answer the point that the Conservatives have not been able to give a single commitment to any increase across the board for local government.

Edward Vaizey: rose

Alistair Burt: rose

Neil Turner: I think that I have been fairly generous in giving way on that point, so I shall carry on.
	It is important that we also welcome the floors and ceilings on funding. My local authority suffers from floors and ceilings, as it does not get as much funding as it would if we did not have floors and ceilings. Opposition Members talk about the amount of money that they are getting and about reductions because they are only at the floor, but they should be grateful to the people of Wigan. We are sufferingwe are the ones who are paying for the fact that you are getting more money than you would otherwise be entitled to. That is important. I agree with the idea in principle. It is the right thing to do, because it gives local authorities the opportunity to make measured and manageable changes rather than the kind of changes that we would otherwise havethe kind of changes that we were forced into in the '80s and '90s. Hasty, ill-considered desperate short-termism was a hallmark of what we experienced.
	The hon. Member for Bromley and Chislehurst was a little disingenuous when he talked about the changes to the formula, saying that it needs to be changedcreaking at the hinges was, I think, the phrase that he used. What he did not say was how he would introduce those changes. If he made a change that gave a 50 million increase to Bromley and Chislehurst and made a 50 million reduction in Wigan, would he do that overnight? Of course he would not. I would hope that he would introduce it in phases. In other words, all he would be able to do is to follow the same floors and ceilings process as we have at the moment. The end result would be different, but unless there was a massive change in local government overnight on 1 April of whatever year he introduced it, such changes would have to be brought in gradually.

Bob Neill: Is the hon. Gentleman saying that he is satisfied with the transparency of the operation of the floors, ceilings and grant distribution criteria at the moment, or could it be improved?

Neil Turner: I am not saying that it could not be improved. Of course, local government finance has never been perfect. We have always known that. The point that I was making was that you were saying that you

Mr. Deputy Speaker: Order. The hon. Gentleman has made that mistake several times now. I was hesitating before I intervened, but he understands why I have done so.

Neil Turner: The hon. Member for Bromley and Chislehurst made the point that the Conservative party would introduce changes. If those changes are to be introduced, either they have to be introduced in one go or they will have to be phased in. If they are introduced in phases, there will be floors and ceilings. It is no use arguing against floors and ceilings and then saying that changes will be introduced.
	The other issue that the hon. Gentleman raised, which is important, was to do with the accuracy of statistics. We all want statistics to be more accurate, and I noted that he welcomed the statement made on that point by my right hon. Friend the Ministerso do I. However, the hon. Gentleman was a little disingenuous when he said that the Australian system would somehow take the matter out of the political arena and put it into the academic arena. That would never happen. We are talking about local government and the services that it can provide for people. Those decisions are fundamentally political. The weighting given to each statistic will be a political decision. In the end, determining whether the allowance for free school meals should be 10 or 15 per head in a particular local authority will be a political decision. No matter whether the statistics are right or wrong, it is that political decision that will influence how much a local authority gets.
	The Government have struck a balance between achieving equity for places such as Wigan that are below target and managing the necessary reductions for those authorities that get more than the formula says. I welcome the reduction in the floor from 2.7 per cent. in 2007-08 to 1.75 per cent. now. Unless the floor is reduced to a fairly low level, authorities that are entitled to more money will never get it. The reduction needs to continue, and I hope that my right hon. Friend the Minister will ensure that it does.
	I shall give a couple of examples of what that means. If Wigan were to get its full entitlement, we would get an additional 6.5 million in 2009-10, and an additional 5.4 million in 2010-11. Obviously, that is 1.2 million better than what we are getting now, but we are still four or five years away from achieving equity. Adding that up, we are talking about Wigan receiving a total of 20 million or 30 million in additional money over a number of years. I believe that this is very much a work in progress, and I urge my right hon. Friend the Minister to make sure that it continues in future settlements so that all local authorities get the entitlement that they deserve from the formula.
	I turn now to the important issue of revaluation. The hon. Member for Bromley and Chislehurst said that the formula was creaking at the hinges, but I think that the problem is that the council tax itself is creaking at the hinges. I believe that the Conservatives designed it to be unfair, and one of John Major's few achievements from their point of view was to create the present unfair system.
	The burden of council tax falls most on the poorest, and least on the richest. We need to change that unfairness, and I think that we missed a trick with the Lyons report. We should have gone for that, or some form of it, as I believe that a property-based council tax is the right way to go. Even so, we need something new and much more transparent that can be integrated with council tax benefit.
	The Nationwide building society and others can tell us how house prices have gone up or down, year by year and month by month. I cannot see why we cannot build a system in which property bands move on a three-year basis, for example, so that values are constantly changing. In contrast, the present council tax was valued in 1989 or 1990.
	I want to touch on housing, which is an integral part of local government finance and services. The housing revenue account is under review, and that is long overdue. The Audit Commission said a number of years ago that it was unsustainable, and that is clearly true. Given that rent increases are running at 6.75 per cent. at a time when inflation is below 2 per cent., and that mortgages are coming down on a monthly basis, the disparity between council house tenants and the rest of the population is clear to see. I hope that the Minister and his Department will take that on board, so that the convergence with registered social landlord housing rents is delayed and the impact on council house tenants is reduced.
	There are issues that we can deal with. If we put more money into housing, it will help the national economy, and help local economies even more. Housing repairs and maintenance, and house building, are labour-intensive, and we source most of the materials from the local economy. They have a massive impact on local authorities and economies. We should put money into that. If we put money into disabled grants, there would be a double whammy: that would not only help the local economy, but would allow people to stay in their own homes. If we allow them to stay in their homesthat, as we know, is what the vast majority want to doit will reduce pressures on social services and on the NHS.
	The Supporting People programme that the Government introduced, and the money that they put into it, is hugely important to achieving those aims. Again, if we look at the amount of money that goes into that, and at the formula, we see that there are huge discrepancies between the money that local authorities should get and the money that they actually get. It suffers from the same problem as the local authority grant. The Department for Communities and Local Government needs to consider whether we can ensure that local authorities can meet people's needs, and can put the money to good use in the local economy. To take the example of Wigan, in 2008-09, we got 7.2 million less than we should have done. In 2010-11 we will have 5.4 million less than we should; that reduction is 1.8 million less than the reduction in 2008-09, but it is still a significant figure. We could do with that.
	When we talk about housing and the Supporting People grant, we also need to talk about the primary care trust. I know that that does not come under the heading of local authority funding, but it is an important issue. Often, local authorities and primary care trusts pool resources, grants and funding. The line between what the NHS provides and what the local authority provides is becoming increasingly blurred. Fights about who should fund what just allow vulnerable people to fall between the two. It is right that PCTs and local authorities should get together on that issue, as they increasingly do.
	I have explained why the Supporting People programme and NHS funding is important. The difficulty arises when a local authority such as mine is underfunded under the local authority grant, under the Supporting People grant, and in its primary care trust funding. That compounds the problems and makes servicing those needs extremely difficult. To give the example of Wigan once again, in 2009-10, our PCT funding will be 4.7 per cent., or 25.5 million, below target. In 2010-11, we will have 25.4 million, or 4.5 per cent., less than we should. That is a 56,000 a year difference, under the final figures. I worked out that, on that basis, we will achieve our target on 14 April 6518 AD. I am not likely to be around then. It is important that we make progress on that issue because of the impact that it has on local government and the services that we provide.
	The shortfall in those three programmes is 36.2 million in one year. If we carry that forward year on year, we can imagine the difficulty that my local authority and primary care trust will have in providing people with necessary services. Those are not services that I have plucked out of the air; I am referring to services that demonstrably and measurably cannot be provided, or fully provided, because of underfunding. I know that the Minister is aware of the issue because Rotherham, his local authority, is in a similar position; I think that the figure is 35.8 million for Rotherham, whereas it is 36.2 for Wigan, over the three years. He is well aware of the problems, and I know that he is working hard within both local and central Government to address those issues.
	The public services that we need must be given those resources. On the Government formulas, the independent advice given by the Advisory Committee on Resource Allocation for PCTs, and other advice given through local government, is that the money that we are talking about is the kind of money that is necessary to provide services that people in Wigan, Rotherham and other areas need. It is not a matter of shifting money from the south to the north. There are areas in London that require additional funding. It is not about towns  v. country. There are country areas that require additional funding. It is about fairness, justice, equity, equality, and giving support to those who need it. That is why we on the Labour Benches came into politics, and why it is so important that my right hon. Friend continues the work that he has done to make sure that all local authorities and all primary care trusts get the resources that they need to provide the services required by their people.

Julia Goldsworthy: It is a pleasure to follow the hon. Member for Wigan (Mr. Turner). I have a great deal of sympathy with many of the points that he makes, because my local authority is also one that is near the ceiling and a long way away from its target funding, and it would benefit from the resources that it should receive, according to the funding formula. I also agree with the hon. Gentleman that it seems sensible to propose a rolling three-year budget that would provide stability, as well as extra flexibility to respond to the difficult economic situation.
	We are in the second year of a three-year agreement, so there are no nasty or pleasant surprises in the reports that we are debating today, although I appreciate that some councils, such as West Somerset, would have been biting their nails until they found out whether they qualified for transitional funding. Ultimately, it is a very tight settlement and the Minister has been up-front about that. The hon. Member for Bromley and Chislehurst (Robert Neill) pointed out exactly how tight the settlement is, once the schools grant is taken out. It will be extremely difficult for many councils.
	Even though the three-year settlement has offered certainty to local authorities and has been useful for planning purposes, as my hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) said, it is not surprising that there were not many responses to the consultation. I wonder, and the Minister may know, whether any of the responses were from individuals. The documentation provided to us is not the easiest to negotiate.
	I notice that in November the Minister's statement was published alongside a guide to the local finance settlement, which replaced the plain English guide to the local government finance settlement, first issued in 1998. No wonder these documents are difficult to understand. I worry that we have a system of local government finance that is very complicated: local government officers, civil servants and Members of Parliament all bury their heads in it to try to understand it, but for council tax payers it is difficult to understand what services they receive in return not just for their council tax, but for the taxes that they pay. We all need to do more to illuminate the process and make it simpler to understand. It is important that the public should be able to do that.
	We have seen a fundamental change in the past year, and since the three-year settlement was announced. Despite the Government's claims to have boosted funding through measures such as LABGI, it is pretty much unchanged since the earlier announcement, and there has been no response to the economic crisis. The economic turmoil is creating extreme funding pressures and uncertainties for many councils.
	The credit crunch has had a significant impact on councils' income, not just from their fees and services, which according to the Local Government Association totalled 11.5 billion last year, compared with the 23 billion that they received in council tax revenue. A significant amount of councils' revenues is received from charges, and the LGA estimates that that could fall by up to 2.5 billion this yeara substantial hit on funding, which may not derive from central Government grants, but will certainly have an impact on their cash flow.
	Councils have also seen lower income from their investments because of lower interest rates. Although the Minister said that as a result of those lower interest rates borrowing is cheaper, I wonder what assessment he has made of whether that borrowing is easier to come by, even if it is cheaper. Councils' estimates of income from capital receipts have plummeted, which has not just impacted on their income, but is impacting on their investment programme. In spite of those pressures, there has been a significant increase in demand for services.

Alan Beith: Before my hon. Friend leaves that point, may I draw attention to the impact of the unavailability of capital receipts from land sales on major proposals to repair and replace schools? That means that local authorities such as Northumberland continue to have a very high maintenance budget for schools such as the Duchess's school in Alnwick, because the capital to rebuild it is not available from land sales.

Julia Goldsworthy: My right hon. Friend makes an extremely important point. The lack of capital receipts impacts not only on capital spending but significantly on councils' revenue commitments.
	Other things, outside the credit crunch, are involved. The whole baby P episode, for example, has resulted in additional demands and pressures on children's services. Furthermore, we still have to deal with the demographics of an ageing population, and that places additional pressure on adult services. My hon. Friend the Member for Kingston and Surbiton (Mr. Davey) cited other issues, such as the number of young people registering to transfer to primary schools. That is having a massive impact. During this debate, he told me that in the past year he has seen a 12 per cent. increase in primary school applications; that has a massive impact on a council's resources.
	As other hon. Members have pointed out, in addition to all that, councils are being asked to take on increased responsibilities. One of the most controversial has been the cost of concessionary bus travel, and there is a question about whether the grants given by central Government cover the costs. Also coming down the line is the roll-out of free swimming. In my local authority area, in Cornwall, we are worried about that because our population doubles in summer; a lot of holidaymakers will benefit from access to free swimming, but the council tax payers will have to meet the costs. There is increasing concern that such additional financial burdens are not being adequately funded.
	Will the Minister provide us with information about how those pressures are impacting on councils and how councils are responding to them? I have seen anecdotal evidence of councils reporting recruitment freezes. Of course there will be further drives for efficiency, but I have heard that councils are using more temporary staff as a way of trying to keep cost pressures down. I would also appreciate the Minister's comments on whether he is aware of any potential plans for significant service cuts. Councils want stability, but they also want reassurance that the Government are sensitive to such rising pressures. Today's statement is a denial of some of the problems that many councils face.

Daniel Rogerson: My hon. Friend is making an excellent case about the pressures under which local authorities find themselves. She has talked at length about the economic problems that we face at the moment. What does she feel about the fact that local authorities have to take up the slack when other Government agencies have withdrawn from areas? I am thinking of jobcentre closures and so on. Local authorities now find themselves having to do the work of other Government agencies

Simon Hughes: Post offices.

Daniel Rogerson: Post offices are also involved, as my hon. Friend rightly says. Local authorities have to carry other things because the other providers that were originally in the area have gone.

Julia Goldsworthy: My hon. Friend makes an excellent point, to which I shall come later. Although last year's pre-Budget report announced additional support for the Department for Work and Pensions for Jobcentre Plus, a lot of such pressures are now falling on local councils. Although increased support has been announced, its scale does not match the problem.
	I now turn briefly to councils' exposure to the collapse of Icelandic banks. That issue has not affected all local authorities, but it has had a significant impact on a number of councils. Before Christmas, the Minister stated that councils would not need to make provision for any possible loss on those investments in 2009-10; I understand that there will soon be draft regulations for us to consider. However, it now seems clear that many councils do not expect to recover any of the losses for the foreseeable future, and that the process of recovering them will be protracted. Does the Minister accept that we need legislation to deal with the issue beyond next year? Councils would appreciate certainty about their ability to deal with the problems in the long term. Is the Minister seeking to give affected councils the powers to capitalise their losses so that they can spread them over a number of years? That would be sensible, as it does not seem as if there will be any short-term resolution to the problem. Today's debate is an opportunity to try to address the issue, but it has been overlooked.
	Councils are not only impacted by the credit crunch themselves; they are already doing a huge amount to respond to it locally and to provide support for people who are struggling. I wonder whether the Government have missed an opportunity to make an announcement offering further support to councils in fulfilling this role. Business rate relief has already been mentioned. There has been talk about whether it would be appropriate to make that relief automatic, because a large number of small business that are entitled to it do not receive it. Surely every effort needs to be made to ensure that those businesses receive what they are entitled to. Why is the Department not following the lead of Her Majesty's Revenue and Customs, which has offered a great deal of flexibility to businesses in paying their business rates? If it were able to offer the same support to councils in terms of flexibility of payment, that could be handed on to businesses and more could be done to ease the burden of many small businesses locally.
	On benefit advice and support, extra resources have been made available to the Department for Work and Pensions to the value of 1.3 billion. There will be similar pressures on councils to deliver council tax benefit and housing benefit, yet they are caught up in the squeeze. I am not entirely certain that the levels of resource that the Minister has mentioned will be sufficient to meet that increase in demand.
	Local authorities are in a good position in terms of being able to identify and deliver capital projects on the ground quickly, but I am concerned that projects are being held up. The private finance initiative is becoming more expensive and appears to be slowing down in some places, and capital receipts are not materialising to fund many of the projects that councils have been planning.
	What more can the Minister's Department do to ensure that these projects can be delivered more quickly on the ground? Has he considered allowing councils to bring forward future capital allocations to get projects moving? Will he support the Local Government Association's recommendation to consider plans whereby councils would pool billions of pounds of existing investment to fund infrastructure projects and support the economy locally? What more can he do to help councils link in to other funds? In Northumberland, particularly in Morpeth, there are huge problems with the capital highway maintenance emergency fund following the huge problems caused by last year's flooding. That could not have been foreseen, but the council is concerned about its ability to provide match funding and the impact that doing so will have on other budgets. Is there anything more that the DCLG can do to link in with other Departments to ensure that these important projects happen?

Alan Beith: I am grateful to my hon. Friend for drawing the Minister's attention to this, because he may be able to have a word with the Department for Transport. Only a third of the costs of emergency repairs to the highway system that was so devastated by the floods will be met by the central grant, because the local authority is expected to fund such a large amount from its existing transport grant, which is itself under pressure because of the overall effect of those weather conditions and flooding on roads throughout the county.

Julia Goldsworthy: I am grateful to my right hon. Friend. These are unforeseen events that the council has to respond to in the context of a very tight funding settlement. Any kind of flexibility from the Department, or anything that it can do to link up with the Department for Transport, would make a dramatic difference.
	Those are all relatively minor proposals that the Government could bolt on to the existing funding arrangements. That is why I am disappointed that no such imagination has been used in this local government finance report. It is a shame that the Minister is not feeling bolder, because we have missed an opportunity to make much more fundamental changes that would give councils a much bigger role in responding to the economic crisis. The hon. Member for Wigan alluded to that.
	One of the key challenges is the lack of social housing. At present, councils are completely hamstrung in their ability to respond to that, and the situation does not change as a result of this funding announcement. Surely it would have made sense to link the publication of the report to an announcement on much-needed reforms to housing revenue accounts. This is an arcane system that prevents councils from using future revenue streams from rent to supplement and fund improvements to their council housing stock. Combined with freeing up councils to borrow prudentially, it could play a massive role in tackling the social housing crisis that we face. It would also be a much fairer way of using tenants' rent, in stark contrast to the current system whereby some of the country's lowest earners are in effect paying a tenant tax that often ends up, almost in its entirety, in Treasury coffers. That is simply unfair. I know that the matter is under review at the moment, but given the economic situation, would it not have made sense to bring that review forward rather than delay it further, which I hear is likely? There was an opportunity for more straightforward and fundamental change, which appears to have been passed up.
	One of the other issues arising from the report is capping. Early indications are that council tax increases for most councils will fall by about 3.5 per cent., but does the Minister have anything to say about the authorities that were capped last time? Does he have any comment on how they fared in the past year, and whether they look likely to be able to deliver within the range that he specified for this year? We are debating the funding formula for new authorities, which I understand has been agreed with those authorities, but I wonder about the impact of many of the efficiency savings that will arise from local government reorganisation in the longer term. By contrast, there will be costs involved in making some of these immediate changes, and I wonder whether that has been reflected in the allocations we have seen.
	The Minister announced today that he would require local authorities to provide, in council tax bill statements, details of efficiency savings that they have delivered. Broadly, I welcome that. I wonder whether the Government will make equivalent information available, because a lot of local authorities are much better at delivering efficiencies than Departments are. I look forward to Departments providing readily accessible information in an equivalent way. Perhaps I can look forward to seeing on my P60 the efficiency savings that the Government have promised and delivered.
	On a related point, an awful lot of public money is not spent by the local authority. Public money is spent locally that never ends up on any council tax bill, and is not part of any efficiency saving process. In the Sustainable Communities Act 2007, the Government made a commitment to produce local spending reports that would provide details of all public money being spent at local level, not just by organisations such as the NHS or the education authorities, but by the many quangos for which there is no direct accountability for how money is spent. I wonder whether the Minister has any plans to tie in his statements on delivering efficiencies with more transparency concerning the amount of money spent locally about which the public often know nothing. They do not know where it is being spent, let alone how effectively or efficiently it is being spent.
	Last year, the Minister said that the settlement does what it says on the tin, and that this year would be a repeat performance. But the fundamental question remains: whether it is right to continue justifying the unchanging nature of the settlement in the light of such uncertain and unstable economic times. A judgment has been made that the assumptions behind the settlement are correctand that is where we disagree. My party's view is that such assumptions are wrong. Fundamental problems with the current funding arrangements have to be addressed, and as we face difficult economic times, the need to address those problems becomes more, not less, urgent.
	Although we welcome the review of the area cost adjustment, there are wider systemic problems that must be addressed. There is an urgent need to review the formula, and the floors and ceiling system must be looked at. The councils at the floor feel that they are falling further behind, while those at the ceiling that are trying desperately to catch up look as if they will never have any prospect of getting the funds that the Government's own formula says that they need. There is a need to continue to cut ring-fencing to free councils to raise and spend more of their resources locally. There is a need to recognise how completely inadequate the current system of local taxation is in providing a link for local taxpayers between the services that they receive and the tax that they pay. It must be recognised that the council tax continues to be an unfair burden for those on lowest incomes because it increases above inflation each year, and is paid out of people's disposable income. They really feel any increases that are made each year. The Government have completely failed to recognise those problems, let alone address them.
	I got quite excited in the debate this afternoon because I thought that the hon. Member for Bromley and Chislehurst was going to announce some amazing brand-new long-term plan for what a future Conservative Government planned to do. Sadly, I was disappointed. The worst-funded authorities will be the least able to deliver what the Conservatives claim will be a council tax freeze. That means that those in the greatest need will be the least able to benefit. Their suggestion is not a long-term plan; it is a two-year proposal. That will hardly address the systemic problems that the hon. Gentleman himself identified.
	We need not a one-off gimmick but fundamental reform, not only of the balance of what is raised and spent locally but of how it is raised. That is about localising business rates, devolving powers and resources to a more local level from the regions and from Whitehall and, of course, scrapping the council tax. Instead of considering those proposals, the Government have so far refused to act even on the most modest proposals in the Lyons report. They have ducked the matter altogether, and are still in a state of denial, when now, more than ever, we need fundamental reform.

Geoffrey Clifton-Brown: On a point of order, Mr. Deputy Speaker. It has been reported on Radio Gloucestershire that Gloucestershire county council has been informed by United Salt, the country's largest supplier of salt, that it will be unable to supply the county council in the near future. That means that after tonight, Gloucestershire county council will have to ration the salting of its roads severely. I understand that a number of other local authorities are in an even more parlous position. I am sure that you, Mr. Deputy Speaker, and the House will understand that that raises serious road safety concerns.
	I ask your guidance on what we can do to get a Minister here tomorrow[Hon. Members: Today.] Or even today, to make a statement, in view of the serious issues involved, about whether the country is running out of salt and, if not, how it can be better distributed among local authorities.

Mr. Deputy Speaker: I think that the hon. Gentleman knows that that is not strictly a point of order for the Chair to rule on, and that the Chair cannot command the presence of a Minister on the basis of what the hon. Gentleman reports. However, his remarks will have been heard by those on the Treasury Bench, and there is also an opportunity for him to submit to Mr. Speaker an urgent question to seek to achieve a ministerial presence in the House. There might also conceivably be an opportunity for the matter to be aired during business questions tomorrow. I hope that with the matter on the record, and with the suggestions that I have offered the hon. Gentleman, it will be possible for some assurances to be given to the House, and through the House to the public, about what the situation is.

Mark Harper: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. I think that I have said about as much as I can possibly sayperhaps more than I should have said. However, I shall take the point of order.

Mark Harper: I thank you for your indulgence, Mr. Deputy Speaker. I simply wish to note that there is a Local Government Minister in his place, so given your suggestion, it might be helpful if before the end of the debate, he could arrange to inform the House of what the Government might intend to do, to save Mr. Speaker from having to trouble himself with deciding on an urgent question tomorrow.

Mr. Deputy Speaker: I think that the hon. Gentleman is trying to be helpful. He will have noted that I used a generic term in referring to the Treasury Bench, in order not to pinpoint or embarrass any particular Minister, but he has probably aimed his remarks in a good direction. Shall we leave it at that?

John Howell: I start by reminding the House that I remain a county councillor on Oxfordshire county council. I do not wish to use this opportunity to engage in special pleading for the council, but that experience is relevant to how the settlement can be implemented and how past settlements have been implemented on the ground.
	For three of the four years for which I have served on the county council, I held a portfolio that was relevant to the debate. Its scope was to drive through efficiencies, make the council more effective and drive through business processes that would enable it to deliver on its financial commitments. I think that we did very well on that, removing several hundred posts from the establishment and introducing business processes in planning and budget management that I think would be the envy of many a multinational. We slashed office costs by creating a shared service centre, which works well and promised 27 million of gross savings in the first seven years. We more than met our efficiency savings targets. However, any sense of pride in those achievements was tempered by the frustration of our expectations that we could, after coming to power with a radical agenda, make radical changes for the benefit of local people. Too often, those aims were frustrated by the fact that the Government perceived us as little more than their local executive arm and placed significant budgetary constraints on us, which reduced our options. The settlement perpetuates that, despite the Minister's words.
	From the outside, councils' budgets may appear large. My county council has an annual turnover just short of 1 billion. However, the amount of money to play with in terms of local choice is pathetically smallonly a few million pounds. At this time of year, when budget debates take place in council chambers, there is a common cry of, Why is so much time spent on so little money? It is impossible to adopt a distinctive political slant. The debate always happens because there is so little scope to alter funding objectives in the rest of the budget. There are two reasons for that.
	First, some spending could not be cut without catastrophic effects on services to vulnerable people. Secondly, a huge element of the budget is ring-fenced to ensure that it can be spent only to deliver the Government agenda. To add insult to injury, that agenda was often euphemistically expressed as shared priorities. I am not sure with whom we were supposed to share the priorities. For example, on highways, five were imposed and our sharing was restricted to one, which we had the option to create ourselves.
	Despite the Minister's comments, freeing up the ring-fenced council grants has not gone nearly far enough to bring back control to local councillors and provide that distinctive local feeling. The hard work of making savings and efficiencies was largely simply to stand still, as the cash made from efficiencies was soaked up by pressures from service needs, demography, which has been mentioned, or new impositions from central Government. Again, some of my hon. Friends have referred to the latter pressure.
	Let me give an example, albeit a small one. Under the Building Schools for the Future programme, the attendant costs of submitting a bid are considerable in the time that senior council officers have to spend on it. A judgment had to be made about whether the costs were worth while, especially given the bias in the programme against affluent areas such as my county.
	In the current climate, there is a huge take-up of services, not all due to the recession. After the baby P case, there has been a 32 per cent. increase in the number of referrals. It defies belief that, with such a mountain of evidence, the Minister can still claim that there are no exceptional circumstances.
	It is perhaps worth considering where the headroomthe amount that we can decide how to spend to give some local character to a budgetcomes from. It does not come from what the Government describe as a generous settlement. The three-year settlement in my council was increased by 2 per cent., 1.75 per cent. and 1.5 per cent. The boasts about investment in local government translate as pure spin and hide the wide regional variations that occur in the settlement as a whole.
	The boasts also hide the fact, which I raised in an intervention on the Minister, that the real inflation rate that councils face has been well over 5 per cent. It is made up of various elements, but energy costs incurred when energy bills were much higher are only beginning to come through.
	For the reasons that I have given, the headroom does not come mainly from savings, because they are used simply to stand still, nor does it come from excessive council tax rates. Being a good, Conservative county council, we have continued to put downward pressure on the rise in council tax in the three years for which there has been a Conservative administration there. Often, however, a major element of financial stability has had to come from the strategic measures that the council has had to take for example in maximising its return on investments. It is no wonder that so many councils turned to Icelandic banks, relying on their interest rates in order to fund services.
	The amounts involved are not insignificant. In the past, those strategic measures could have accounted for as much as 1.5 per cent. of a council's total budget requirements. That is a phenomenal amount of money. In the current downturn, a council would be lucky if those strategic measures accounted for 0.5 per cent. of its budget requirements. That has a major impact, in terms of the need both to rethink the strategies for borrowing and to make reductions in the headroomand, therefore, the need to cut services or achieve further efficiencies.
	I do not particularly want to conclude with an image of total frustration, but I am afraid that it is one that many councillors would identify with, owing to the way in which the Government have handled local government and the current settlement. They have eroded the chance to put a local face to local services, undermined local democracy and shown that they simply do not trust local councillors to make good local decisions. The Government have undermined good business practices by making it more difficult for councils to plan for the long term, because all the effort is put into meeting short-term Government targets, and they have imposed a ridiculous and meaningless burden of inspections, the like of which they would not dare to subject themselves to.
	In one year, we had the unfortunate experience of having a full comprehensive performance assessment of the council, as well as having to put all the information together for the Government's ill-conceived plans to try to encourage us to bring forward unitary proposals. Both sapped senior resources in the council to a quite unimaginable degree. The effect of that on how we took forward our plans was quite significant. Moreover, the Government have presided over a financing system that is so opaque as to be practically incoherent. Many councillors believe, I think quite justifiably, that its whole purpose is to maximise the opportunities for central Government to get their own way. It is time for the Minister to put forward some proposals that allow the people to whom councils are really accountable finally to make the judgments.

Alistair Burt: It is a pleasure to take part in this debate. There is a form of friendship among those who have spoken at the Dispatch Box about local governmentindeed, I hope that I can call the Minister and my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), who represents our Front Bench, two of my friends in the House.
	I know the hon. Member for Falmouth and Camborne (Julia Goldsworthy) rather less well, but she has a very good grasp of the subject, and always speaks knowledgeably and well on it. I was a bit surprised when she said that she was excitedI wondered what I had missed in the debate so farbut she managed to convey why she was excited. From that I took it that she was even excited by the prospect of our becoming the Government. I share that sense of excitement.
	The hon. Member for Wigan (Mr. Turner) reminded me of when I was the sponsor Minister for the city challenge project in Wigan. I would like to put on record how much I enjoyed that experience and how much I enjoyed working with the excellent Peter Smith in Wigan. That project was an attempt by the Government to be involved in supporting a local authority when times were difficult. In answer to the occasional jibe that is thrown in our direction about apparently being a do nothing Government at the time of the last recession, I would say that, as the hon. Gentleman will know, there was not much vested political interest in the Conservative party being heavily involved in Wigan through the city challenge project. We were doing it because it was the right thing to do at a difficult time, when we were affected by, if I may say so, a global change in manufacturing, for which we were blamed by hon. Members on the Labour Benches. It is an ill wind that comes round to see another Government being affected by what is apparently a global change and catching the drift of public discontentin this case, quite rightly.
	I want to make some general remarks about the settlement, followed by one or two particular ones. When I spoke from the Dispatch Box a couple of years ago, at the time of the first three-year settlement, I said that I welcomed the certainty that three-year settlements established. Since then, however, we have seen one of the problems with such arrangements. In a land where boom and bust no longer exist, a three-year settlement has some merit, because there is stability and we can plan. In the real world, where it turns outto the surprise of no one except the Prime Ministerthat boom and bust have not been abolished, the deficiencies of a three-year settlement become exposed. The settlement is subject to pressures that no one could have imagined at a time when certainty was guaranteed. As we all know, those pressures come into the equation and cause difficulties, a number of which have been mentioned.
	Investment income for local authorities, and income from property, searches and business rates, constitute a relatively small sum compared with the overall settlement, but because of the tightness of gearing in local authority finance, they actually constitute quite a significant amount. The pressures from these changes and the impact of the credit crunch on local authorities, which colleagues on both sides of the House have identified, are very real. The Local Government Association has published a series of figures, but I will not read them out because the Minister knows them well. Those new pressures have come into the equation, but some of our original concerns with the settlement, which my hon. Friend the Member for Bromley and Chislehurst highlighted earlier and my hon. Friend the Member for Henley (John Howell) has just explained, are still in the system to cause concern.
	For example, adult social services remain a worry for everyone in local government because we know that the inflation figures that the Government have calculated do not meet the needs of those who come into the system needing care. That is a source of concern whenever councillors get together. Will the Minister pay particular attention to the transfer of youngsters who have been in care and who, on becoming adults, have found themselves in a situation where provision has tended not to be made, over the years?
	I recently visited Hinwick Hall, a special school run by Livability, the organisation that was put together by the merger of the Shaftesbury Society and John Grooms. It cares for a number of youngsters in a residential setting, but the teachers and parents involved are constantly concerned about what will happen to the youngsters when they finish full-time education and leave that environment to go back to their original local authority, because the necessary provision is so often not there.
	A growing number of youngsters are coming into that situation, and there will be a need for more provision, not less. I am not sure that the amounts already accounted for in the grant formula for adult social services will meet that need in the future. That will remain a concern for everyone. In relation to cash for highways, the inflation figures often outstrip the figures calculated by the Government. Public care costs, which a number of lawyers in my own area have mentioned to me, are also increasing, as my hon. Friend the Member for Henley has said.
	I want to make some particular points about Bedfordshire. The Minister will know all too well the background to the situation there, and whatever hair he did not lose as a result of his previous job has certainly been lost through dealing with those problems. That applies to me as well. Some colleagues might remember that before I went to Bedfordshire I had a full head of hair, played football and all that sort of thing. Bedfordshire has dealt a savage blow to all that.
	The background to the situation in Bedfordshire has been the steady rise in council tax98 per cent. in Bedford borough and 105 per cent. in Mid-Bedfordshire district council since this Government took officeand the pressures now being created by the unitary process, which the Minister will understand very well. I have expressed concern in the past that the introduction of the unitary process involved a quick, late decision by the Government, which put extra pressures on the councils involved. Will the Minister reassure me that he will take a very close interest in the work of the excellent implementation teams in Bedfordshire and Bedford councils to ensure that, despite the difficult time scale, the process works?
	There was some disquiet locally when both councils announced quite small local tax increases this year. It had been hoped initially that quite significant reductions would emerge through the unitary process10 per cent. or 12 per cent. was quoted by the mayor of Bedford, but he recently had to announce that he was looking for a rise of slightly less than 1 per cent. That is very different from what was said previously, but I am sure that this is only the first stage and that savings will come from the unitary process as promised, particularly if both councils elect a Conservative administration at the first available opportunity. It is early days; I am sure that more will happen in future.
	I would like to take the opportunity to put on record my thanks to councillors who have served on the councils in my constituency that are going to form the unitary councilon Bedford borough council, Mid-Bedfordshire district council and, last but not least, Bedfordshire county council, which will cease to exist in April after more than 100 years of service. Some sterling work has been done there by councillors and the council has largely been Conservative-run through most of its history. In recent years, it moved from being a no-star council to a three-star council over a very short period: it became one of the fastest and best-improving councils in the country.
	I was reminded of that fact today when I attended the funeral of Councillor Phyllis Gershon, who recently died in harness. She was 89 years old. I suspect that most Members think very fondly of some councillors for their extraordinary service. Phyllis encapsulated what local authority service really means: genuine commitment to an area; no side; no privilege; doing her work honestly and well. Many councillors have done that over the years and they are responsible, I think, for some of the Government's success in local government. They have helped the Government to meet targets that were difficult to achieve through Government Departments, and they have done so through the hard work and effort of local councillors. I hope that we would all give credit to them for that.

John Healey: indicated assent.

Alistair Burt: In the remaining moments available, I want to bring two or three particular issues to the Minister's attention. As far as the credit crunch in Bedford is concerned, figures from Bedford council show that it expects to lose about a third of its investment income this year. It used to bring in about 2.6 million, but it will lose about 900,000 this yearquite an amountfrom the change in interest rates. If we add in the property, the searches and perhaps section 106, I am slightly surprised that with all that going on, the Minister thought that his original settlement could stay stable.
	Secondly, concessionary fares have been highlighted by several Members. Bedford council reckons that it will take a hit of about 250,000 on those fares. The Minister is adamant that the overall figure appears to the Government to meet the needs imposed as more people take up the concessionary fare scheme, but many councils have denied that, so I genuinely ask the Minister to reconsider it at some stage. The tight gearing means that these amounts really count for local authorities. If, when the scheme is fully implemented and the figures come in, it turns out that local authorities have lost out significantly, will the Minister give a commitment to looking at it again and make some recompense?
	Thirdly, Building Schools for the Future is important for Bedford council. I am pleased about the support it is getting from the Government, but the local education partnership and the financing of the programme have come in for criticism from all sides. I would be keen to know what the Minister includes in the figures for the future financing of the partnership under the new unitary council and how he believes it will be paid by council tax payers in the future. People fear that it could be a considerable amount. I know that the Minister has looked at it very carefully and I accept that this is good news for Bedford council and its schools in the future, but how it will be paid for is a matter of concern. If the Minister cannot address that issue today, perhaps he will do so on another occasion.
	Finally, on help for business, I recently had a meeting with the Sandy chamber of trade, which said that it had hardly noticed any difference as a result of the 12.5 billion spent on VAT changes, and that if that money had been put into reducing business rates for small businesses, it would have meant a great deal more. Perhaps the Minister will review this issue in due course and see whether better ways of supporting small businesses can be found than these VAT changes.
	We will always have debates such as this. The expectations of local authorities are very high, and the expectation of Government is very high. There will never be enough money to satisfy all the needs, no matter who is in office locally or nationally. The idea of the three-year settlement is good, but it has the flaws identified by my hon. Friend the Member for Bromley and Chislehurst. I am sure that my hon. Friend, like me, looks forward to the occasion when he will sit on the other side of the fence and will have to put some of these difficult proposals into operation.
	The Minister, for his part, is rightly proud of his work both in the Treasury and in local government. We know him to be an honest and extremely capable Minister and in due course, I am afraid, he will make a very good shadow Secretary of State for the environment and local government when he is given the chance.

Edward Vaizey: It is a great pleasure to follow my hon. Friend the Member for North-East Bedfordshire (Alistair Burt). As I listened to his speech, I was reminded that Bedfordshire, or rather Bedford, has the largest Italian population in Britain outside London. I think that that is worth remembering during these troubled times at the Lindsey oil refinery. I also congratulate my hon. Friend on promoting the Minister to the next Labour shadow Cabinet.

Alistair Burt: Richly deserved.

Edward Vaizey: My hon. Friend clearly has the highest regard for the Minister, which I share.
	The debate gives us an opportunity to honour some of the leading lights in local government. I do not think that council leaders are ever given enough credit in the House for the work that they do. Among those whom I know or have encountered is Keith Mitchell CBEleader of Oxfordshire county council and a colleague of my hon. Friend the Member for Henley (John Howell)who since the Conservatives took control of the council at the most recent local elections has done an outstanding job in putting its finances in better order while improving services at the same time. I shall say more about that shortly.
	I am also thinking of men such as Stephen Greenhalgh, leader of Hammersmith and Fulham council. I know that the Minister received a presentation from that Conservative council last week on the excellent work that it has been doing in reducing council tax while improving services. Then there is a man who, in my view, is not given enough attention in the national press: Mike Whitby, the leader of Britain's second city, Birmingham. He is a kind of pre-Boris Boristhe first Conservative mayor of a big city for some yearsand he has been a superb leader of that city.
	What unites the three gentlemen whom I have mentionedand I have mentioned those three merely because they are the ones whom I know bestis a passion for the areas that they represent, and a passionate desire to give their council tax payers, the residents and the local population the best service possible. That, I think, goes to the heart of some of the frustration expressed by Conservative Members today about central Government's attitude to local governmentthe stranglehold in which central Government hold local government, and the almost psychotic wish of central Government not to allow local government the flexibility to experiment or innovate. Local government is simply there as central Government's whipping boy.
	We see from the Government endless initiatives designed to catch headlines, particularly on issues such as free swimming, which concern me as a shadow Minister for Culture, Media and Sport, but also on issues mentioned by other Members, such as free local transport. The Government take the plaudits for those initiatives while expecting local government to pick up the bill. I suspect that the postbags of all Members in every part of the House will have been full of letters from constituents saying I heard this announced by the Government six months ago: why is the council not implementing it? We have to tell them that it is because, having announced it, the Government did not give the council the money.
	Another thing that all Members will find frustrating is the sheer hypocrisy of Government. I must say that I think it is a good idea for council tax bills to contain details of the efficiencies and savings that a council has managed to come up with. I suspect that Hammersmith and Fulham council will do that without any impetus from Government, because it has a fantastic story to tell about the savings that it has achieved for local council tax payers. It is, however, mind-boggling hypocrisy for the Government to patronise local government by saying, You will do this, and you will be made to be more efficient, but heaven forfend that local councils should push back and say, Well, how about you putting some of the efficiency savings that central Government have made on your income tax bills, and the other bills that people receive from the Government? Central Government spending continues to rise inexorably, while all the time they are strangling local government spending.
	My hon. Friend the Member for North-East Bedfordshire alluded to the fact that we have these debates all the time. Particularly for those watching outside the Chamber, there might be the feeling that here we go againthat were there to be another Conservative Government, we might be in this Chamber in some years' time with Labour Opposition Members complaining about the high-handed acts of central Government. However, I anticipate that there is on the Conservative Benches a genuine appetite for a change in the relationship between central and local governmentfor more power to be pushed down to local government.
	We have talked about my hon. Friend the shadow Chancellor's commitment to freeze council tax in partnership with councils that will come to the table. The hon. Member for Telford (David Wright) is no longer in his place, but I would remind him that he can put Oxfordshire county council at number one on his list of councils that said they would come to the table for that council tax freeze.
	We have also proposed referendums, so that if a council wants to increase the council tax above a certain level, the local people will have a chance to say, Yes, we approve of that spending; we think it is the right thing to do in the circumstances, or No, you've breached your covenant with us; that level of spending is too high, so go back and think again.
	We have talked about locally elected police commissioners. That is a radical idea that might frighten the horses, but it is about giving accountabilityabout allowing local people a say in how local services are delivered. That is very important.
	I do not live in cloud cuckoo land; I know that there will always be frustrations between central and local government, particularly while central Government continue to provide the bulk of the funding for local government. However, I believe that our party is on a journey to push power back to local councils. The reason for that is partly historical; we have been in opposition for 10 years, so our opportunity to exercise power has come at the local level. That has given this House outstanding Members of Parliament, such as my hon. Friend the Member for Henley and my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), who is another outstanding local government servant. It has also given us outstanding council leaders and an opportunity to think and innovate.
	Let us look at what is happening in Oxfordshire county council. The increase in the budget from central Government is pathetic: it is 2 per cent. in 2008-09, 1.7 per cent. for 2009-10 and 1.5 per cent. for 2010-11. Those budget decisions were made by Ministers because Oxfordshire county council is, of course, a floor authority. In his budget speech, the leader of the council, Keith Mitchell, saidagain, they were bitter words of frustrationthat we now have a financing system for local government that is
	so opaque as to make any coherent analysis impossible.
	He said that if he was a cynical man he would have believed it was
	designed to minimise transparency and...maximise the opportunity for political manipulation.
	That is where we have got to in terms of the relationship between central and local governmenta system that is so opaque that even a man who has served at county council level for 20 years, and who leads a county council with a 1 billion budget, cannot make head or tail of it, and neither can his officersor, I suspect, officials in the Minister's Department. We must rip this up and start again.
	Despite the constraints I have described, the county council continues to deliver value for money for local council tax payers. It has achieved efficiency savings of 40 million, and it will be proud to put that on its council tax bills. It has reduced the rate of increase in council tax from 4.5 per cent. to 3.75 per cent., which is far ahead of its own target. My hon. Friend the Member for Henley alluded to the fact that it has achieved that through greater shared services. The council has other achievements: electronic social care records; the refurbishment of its offices; closer working between the special educational needs department and the primary care trust; putting in place, despite a lack of Government funding, new provision for post-16 SENa campaign in which I was closely involved; free parking; and the refurbishment of Oxford city station. Of course, the crowning glory is the fact that it is the first county council to receive a corporate charter mark. I have no idea what a corporate charter mark is, but I am immensely proud that my county council was the first to get one.

John Howell: Let me inform my hon. Friend of what a corporate charter mark is. I happened to be the councillor who thought of the idea of the council's going for it and then pushed it through. It is a statement to the people of Oxfordshire that the council takes its relationship with them seriously in terms of the customer service it delivers. The thing that excited me was the enormous enthusiasm of ordinary officers and officials in the county council for taking it up.

Edward Vaizey: I am extremely grateful to my hon. Friend for explaining that to me. I knew when I was about to praise the county council for attaining the corporate charter mark that it was a good thing, but until his intervention I did not realise just how good a thing it was. I know that in his closing remarks the Minister will want to make that point again and perhaps encourage the few remaining Labour councils to apply for a corporate charter mark.

Alistair Burt: Will my hon. Friend speculate as to exactly what it is in the waters of the River Thames that makes Members for Henley have such a grasp of local government and makes them such local government geniuses? No doubt, the next Mayor of London is sitting right in front of us now.

Edward Vaizey: My hon. Friend has hit on something there, and I wish to elaborate on the waters of the Thames, because by doing so I shall move on to Hammersmith and Fulham councilI know that the Minister has been given a presentation by it. The source of the Thames is in the area represented by the leader of the Conservative party and meandering down it one finds the constituency that was represented by the Mayor of London and is now represented by my hon. Friend the Member for Henley, who is going to be a star in the next Conservative Cabinet, and later Hammersmith and Fulham, which has a Conservative-controlled council, put in by the people of Hammersmith and Fulham after the abject failure of a previous Labour administration.

Neil Turner: Is what the hon. Gentleman is saying about the waters of the Thames possibly due to the fact that it has been filtered through 15 sets of kidneys?

Edward Vaizey: I am testing your patience, Mr. Deputy Speaker, and unwittingly the hon. Gentleman has just given me a hook whereby I could spend 10 minutes talking about whether my constituency should have a reservoir or whether it is better to concentrate on effluent reuse in order to supply the people of London with water. However, I shall not be distracted by that temptation, and I am aware that another Conservative Member wishes to speak, which again shows the massive commitment on these Benches to this debate and to local government.
	Hammersmith and Fulham council has saved the average council tax payer 700 in three years. It has cut spending by 18 per cent. and it has reduced its debt, yet residents' satisfaction has increased and council services have improved. There is a serious point to be made: Conservative Members constantly have to put up with Labour spin, if I may use that term in this Chamber, whereby any proposal made by a Conservative is described by Labour Members as a cutthey always ask what we are going to cutand any proposal that the Government make is described as an efficiency saving, despite the fact that after 11 years we have never seen any example of an efficiency saving.
	If people want to see efficiency savings and value for money in practice, they should look at the Conservative councils that have had to operate within this incredibly tight financial framework, but have still managed to reduce the rate of increase in council tax and improve services for council tax payers. In the June elections, I believe that the people of this country will put their faith in Conservative councils as a precursor to putting their faith in a Conservative Government.

Tim Loughton: I had not intended to speak in this debate, but I was so moved by the contribution from my hon. Friend the Member for Wantage (Mr. Vaizey) that I wanted to make a few commentsalthough I cannot claim to be inspired by the waters of the Thames. The water is rather saltier down on the south coast.
	The Minister, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) and other hon. Members have spoken about the need for efficiency savings, smart purchasing and innovation. Too much innovation in local government is stifled by the stranglehold that the central grant system still has on the way in which local government runs. My local councilsAdur council and Worthing councilhave been creative in working together in the last few years. Their joint working is so advanced that it is used as a model for many other councils. Without actually merging, Adur district council and Worthing borough council have merged some departments, so we now have a joint rubbish disposal department, which can buy a joint fleet of environmentally friendly, state-of-the-art trucks. We have merged the management system and the legal services department to save staff overheads. The councils also have joint IT purchasing agreements with other local councils. This provides a model for how councils can run their operations more cheaply without compromising qualityindeed, they can enhance quality.
	We have much to be proud of, and that is why it is so galling that all that good workto reduce the cost of running local government at the same time as improving servicescan be undermined by an obligation, such as concessionary bus fares, that has been imposed on local councils. I should say that I am fully in favour of the concessionary fares. When I mentioned this in a debate last year, I was misinterpreted by irate pensioners who thought that I wanted to curtail their jaunts on buses. I had no such intention. If people want to take more bus journeys, that is fine. They are good for their health and I am fully in favour of that. However, if the Government are to be true to their word and fund the policy fully, the funding allocated between local authorities has to be fair.
	I do not dispute that the total sum provided may be the total amount required, but the sum provided to run the scheme in Worthing and Adur falls well short of the actual cost. I will take up the Minister's earlier invitation to send him details, and I hope that he will meet another delegation. This year, Worthing faces another deficit of 500,000, which is the equivalent of several percentage points on its council tax. The council would much rather have lower council tax and see that money spent on services. That is why the situation is so unfair and galling. In my part of the world, the high pensioner population creates extra demands. We have the highest proportion of over-85s in the country, at some 4.6 per cent., with the resultant extra requirements for expenditurewhich we are happy to make.
	As a floor council, West Sussex county council is right at the bottom of the pile. Our increase this year is 1.75 per cent., or an extra 1.7 million. If one takes away the school spending, that equates to 4p a week more per resident per week for all services except schools over the next year, and the increase is even less next year. In contrast, Dorset does not have the area cost adjustment and it will get a grant rise of 7.6 per cent. Its demographics are similar to ours.
	The Minister asserted in his speech that councils have received above-inflation increases since 1997, but West Sussex is in no such fortunate position. Its rise of 1.75 per cent. compares with a RPI figure of 3 per cent. The same was true last year: our grant increase was 2 per cent. with an RPI of 4.3 per cent. Those low rises are a direct consequence of changes made by Government to the grant system, removing funding from West Sussex and many other south-east authorities for the benefit of authorities in the north and midlands. If we had received an average grant settlement since 2003-04, when the Government changed the grant system, that would have produced an extra 28 million per annum for the countyenough to fund 700 extra social workers or to provide 1,680 residential care placements or more than 600 foster care placements. The impact of general inflation on non-school services alone is more than 10.5 million this year, and we are getting 1.75 million.
	On children's services, the public law fees for child care hearings that have increased will cost the county 200,000an extra cost beyond that funded by the Government in the 2008-09 settlement. All the extra requirements for child protection that we debated in the House last night will impact on our budget. On adult social care, a lot of extra costs simply will not be funded.
	In other areas, such as recycling, West Sussex has made great innovations. It has committed 1 billion in total over the next 25 years for a state-of-the-art biological digester plant that will produce compost and dispose of our waste in a very environmentally friendly way. That will all be funded with no additional Government support. We are doing good things in our councils, but I am afraid that is despite rather than because of Government funding.
	We welcome the area cost adjustment review that is under way. The most frustrating aspect of the ACA is that we are denied access to the data necessary to check and review the Government's own calculations. There is too much smoke and mirrors. We need greater transparency in the way that local government is financed and we need to support, rather than undermine, the great innovations introduced by many of our local authorities in quite difficult positions, particularly in Worthing, Adur and West Sussex.

John Healey: With the leave of the House, I want to respond to some of the points made in the debate. I had not quite expected to be called to speak just at that moment, Mr. Deputy Speaker, but I am grateful to you for calling me. Let me pick up where the hon. Member for East Worthing and Shoreham (Tim Loughton) left off and say that I look forward to any further information that he chooses to send me.
	May I also pick up on the point of order made by the hon. Members for Cotswold (Mr. Clifton-Brown) and for Forest of Dean (Mr. Harper)? You pointed a finger in my general direction at that juncture, quite understandably and reasonably, Mr. Deputy Speaker. I am sorry that neither of the hon. Gentlemen is in the House to hear the brief update that I can give. They expressed concern about salt supplies in Gloucestershire. The Government, through the Government office resilience teams, are monitoring the situation very carefully, with the prospect of bad winter weather later in the week in some areas of the country. The Local Government Association is working very closely with us and is brokering an arrangement to ensure that the stocks of salt and grit in different areas can be best used and can be moved when required to the areas where the priorities are most pressing. That mutual aid arrangement involves not just local authorities and local highways authorities but the Highways Agency, which carries stocks of grit and salt. Such arrangements are now relatively common and relatively well proven to deal with a range of problems. Assistance from local government and other agencies, where necessary, is provided to those areas where the problems are greatest.
	Such arrangements have worked well in dealing with other problems in the past. We are keeping a close eye on how the salt and grit supplies last, but at this stage I have confidence in the arrangements that local government, working with the highways authorities and Highways Agency, can put in place.

Bob Neill: I am grateful to the Minister for giving way. I am sure that all hon. Members will welcome that information and be grateful to him and his officials for taking the trouble to supply it. Have the highway authorities, the Local Government Association or his Department made any assessment of the total quantity of salt available in the country? What arrangements will be made for rural areas, where the danger is that roads may become impassable before the salt can be shipped in?

John Healey: I do not have an audit of salt and grit stocks across the country, and I am not sure that one has been completed. The levels being held will depend on the preparations that local authorities have made, and on the amounts that they have deemed necessary to put on the roads in recent days. The Highways Agency has sufficient stocks that it has been able to make at least a day's worth available to local highway authorities. That is a valuable contribution to the arrangements that the LGA is helping to broker to ensure that salt and grit are where we expect the greatest pressure to be, or where the priorities seem most pressing. I hope that helps the House.
	I turn now to the substance of the debate, beginning with the hon. Member for Bromley and Chislehurst. He said that things had changed since the start of the three-year settlement, and it is certainly true that his party's promises about local government have changed.  [ Interruption. ] We are talking about funding for local government, and what has changed is that a Conservative Government would now make the limit for local government a rise of 1 per cent. in real terms above inflation. That compares with the 2.8 per cent. rise in real terms for the core grant that we are putting in place for next year.
	Moreover, if a Conservative Government were elected, the change that I have described would be introducedand felt by local governmentnot in some distant future but after only eight weeks. Some 240 million would be taken out of central Government's core grant to local government. It is really not good enough for the hon. Member for Bromley and Chislehurst to suggest that somehow that could be dealt with through efficiency savings. They cannot be made in such a short space of time, so the Conservative plan can mean only one thingthat the services that people need would be cut.
	In many ways, this is a case of back to the future

Edward Vaizey: Oh, come on!

John Healey: There is a bit of chuntering on the Opposition Benches, and I am not surprised, as Conservative Members do not like to be reminded that central Government funding for local government in each of the four years up to 1997 did not rise by an amount above the level of inflation, as it has done since 1997. Nor did that funding rise in line with inflation: instead, it fell by 7 per cent. compared with inflation in those four yearsa point of which my hon. Friend the Member for Wigan (Mr. Turner) quite rightly reminded the House.
	The hon. Member for Bromley and Chislehurst was challenged by the hon. Member for Falmouth and Camborne (Julia Goldsworthy) about his policies on council tax. I understand why he shifted uncomfortably and chuntered rather vaguely for a while, as the shadow Chancellor is conning the public with his announcements and suggestions about a council tax freeze. For example, he said to the Conservative party conference:
	I can tell you today that the next Conservative Government will freeze your council tax for at least two years,
	but that was a con, as not all council tax payers' bills would be frozen, only those in the areas taking part in the scheme. Moreover, how would the freeze be paid for? The Conservative leader has said that the money would be taken from central Government advertising budgets, but he has suggested that those same budgets would pay for other policies.

Stewart Jackson: Such as?

John Healey: I am thinking of the proposed changes to the tax on savings, for example.

Edward Vaizey: One of the Government's difficulties is that they spend so much time reading Conservative proposals that they never have time to do anything themselves. Does the Minister agree that the Institute of Fiscal Studies has confirmed that the Government are cutting spending by 35 billion? Can he name a single Labour council that has ever cut council tax for its council tax payers?

John Healey: When I spoke earlier, I named three Labour councils that are keeping council tax under control. Hackney, Greenwich and Newham are set to freeze council tax next year. One of those, Hackney, is to freeze council tax for a fourth successive year at a time when it is improving services, not cutting them; too often, cuts are Conservative councils' method of keeping council tax pressures under control.

Bob Neill: Perhaps the right hon. Gentleman would like to contrast the amount of grant received by those three local authorities with the average grant for Greater London authorities of all complexions. Secondly, will he confirm that regardless of whether something has changed since the last settlement, something has changed for him in the past three hours since he said, Low tax does not have to mean service cuts?

John Healey: Low tax does not need to mean service cuts. It does not mean it in Hackney, Newham or Greenwich. The hon. Gentleman asked about the funding formula for those three councils; it is precisely the same funding formula that is applied to other London councils, and to all councils across the country.
	I welcome the hon. Member for Wantage (Mr. Vaizey) to this debate on local government. It is good to see him here. He was right to pay tribute to our council leaders. Many councils across the country are well led, and it is important that we make that point, irrespective of party. He described their passion for their areas, and he is quite right. We see in the best of local government a commitment to the very best in public service. I am just disappointed that his contribution to the debate went downhill after that.
	I had not heard the hon. Member for Henley (John Howell) speak in this House before. I genuinely welcome his experience in local government. I welcome the interest that he and Members of all parties take in the subject and in our debates. I hope that his clear and genuine localist commitment does not disappear during the time that he looks forward to spending in this House. Like the hon. Member for Wantage, I am grateful to the hon. Member for Henley for his exposition of what a corporate charter mark is. It was instructive to Labour Members, as well as to Conservative Members.
	The hon. Member for Henley talked about the settlement figures in Oxfordshire and took me to task on the figures for local government generally. The figures speak for themselves when it comes to investment and increased funding from central Government to local government. The distribution of the funding reflects the relative wealth of an area, and its ability to raise revenue locally in light of its council tax base. It also reflects the relative need and deprivation of areas. He complains that Oxfordshire is a floor authority that had a 2 per cent. rise last year, a 1.75 per cent. rise this year and a 1.5 per cent. rise next year, and then complains about the floor. I have to say to him that those rises are a result of the application of a formula that takes into account the relative wealth and needs of an area. Without the floor, which we introduced several years ago, Oxfordshire would be 9 million worse off this year, so I am surprised that he does not welcome, rather than criticise, the floor.

John Howell: rose

John Healey: My hon. Friend the Member for Wigan welcomed the three-year settlement

Edward Vaizey: Give way!

John Healey: No, the hon. Member for Henley has had his speech.
	I now turn to the contribution of my hon. Friend the Member for Wigan. My hon. Friend was right to say what a significant reform to local government policy the three-year settlement is. Like the hon. Member for Henley, he speaks with great authority about local government; I believe that he served not just as a councillor, but as chair of a finance committee

Neil Turner: I was chair of the direct works committee and the best value committee.

John Healey: My hon. Friend was a senior councillor on Wigan council. He made wide-ranging comments about primary care trust funding. He made strong arguments for the economic value of council activity and council investment in housing. I listened with care and interest to his views on the future reform of council tax.
	I come to the speech of the hon. Member for North-East Bedfordshire (Alistair Burt). Let me start by reassuring him that I am keeping a close eye on the preparations for 1 April and the new unitary authorities in Bedfordshire. Like him, I want the change to be successful and in the interests of all Bedfordshire residents. If he has a particular concern about the plans for schools, I will happily discuss it with him later, as he asked me to.
	The hon. Gentleman was right to remind us that he welcomed the three-year settlement from the Opposition Dispatch Box when I first announced it. He went on to argue that the settlement should be set aside because of the economic downturn, rather than the period of economic stability that we have had in the recent decade. I was curious about that, because it is not what local government are saying to us. The association that represents his county council, for instance, the Society of County Council Treasurers and the County Councils Network, said that it
	is pleased the Minister has confirmed that the 2009/10 Local Government Settlement would not be re-opened and reduced, providing counties with the financial stability promised by multi-year settlements.
	That is a view that crosses party lines. Labour-led Barnsley responded by saying:
	Barnsley welcomes the stability and predictability offered in this second year of the three-year settlement and is pleased that there were no changes made to the initial announcement as a result of the current economic climate.
	East Sussex county council, an interesting one to pick, stated:
	We also welcome the decision not to reopen the 2009/10 Local Government Settlement announced last year, and thereby continuing to provide the financial stability promised by multi-year settlements.
	The hon. Member for Falmouth and Camborne made the point that the support that we have been prepared to give to councils that may have had investments in Icelandic banks has been insufficient. We made the financial experts available to those councils that felt that they might experience short-term pressures. We funded that extra expertise. We are now allowing accounting treatment next year, so there will be no hit on council budgets or on council tax.
	Beyond that, surely the best thing for us to do is to continue to press for depositors to recover their funds as fully as possible, rather than writing off those deposits now and looking to a case for capitalisation or some other measure to make good any potential losses. Those are funds, as I said earlier, that are not lost. They may be at risk, and surely taking steps now and concentrating our attention on trying to get those funds back, with local government and the Local Government Association, is the best thing to do.
	The hon. Lady was right, and I think I made the point in my remarks, that the recession is creating pressures on local authority budgets and cash flows, but as the chief executive of the Audit Commission said in its recent report,
	the pressures are real but councils are coping with them well.
	It was the Conservative leader of the all-party Local Government Association who only this month said:
	Councils are working hard to keep council tax down, to keep local businesses afloat and help people deal with the impact of the recession.
	The funding settlement for local government will help them do just that. The increase in flexibility and freedom allows them to decide how best to spend the funds for their area, and above all, the increase in fundingabove inflation next year, as it was last year, and every year since 1997 under a Labour Governmentwill help them do just that.
	 Question put and agreed to.
	 Resolved,
	That the Limitation of Council Tax and Precepts (Alternative Notional Amounts) Report (England) 2009-10 (House of Commons Paper No. 149), which was laid before this House on 21 January, be approved.

LOCAL GOVERNMENT FINANCE

Resolved,
	That the Local Government Finance Report (England) 2009-10 (House of Commons Paper No. 150), which was laid before this House on 21 January, be approved. (Ms Butler.)

Business without Debate
	  
	delegated legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)).

National Health Service

That the draft Health and Social Care Act 2008 (Registration of Regulated Activities) Regulations 2009, which were laid before this House on 12 January, be approved. (Ms Butler.)
	 Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)).

Protection of Animals Used for Scientific Purposes

That this House takes note of European Union Document No. 15546/08 and Addenda 1 and 2, a draft Directive on the protection of animals used for scientific purposes; and supports the Government's aim of securing practical, proportionate and enforceable legislation that makes proper provision for the welfare of animals used for experimental and other scientific purposes, without delaying or preventing the scientific progress and benefits which responsible animal use can bring, and does not impose any disproportionate regulatory burden which could have adverse consequences for the competitiveness, sustainability and success of the research base in the United Kingdom and Europe. (Ms Butler.)
	 Question agreed to.

PETITION
	  
	Planning and Development (Sutton)

Paul Burstow: I present this petition on behalf of many thousands of my constituents and my local authority, the London borough of Sutton. The petition seeks protection for garden land from the rapacious appetite of developers.
	Garden land is precious. It gives character to an area, it provides opportunities for leisure, and it is good for local wildlife. Once garden land is developed, it exposes the neighbourhood to greater air pollution from cars, increased risk of opportunistic burglary and a loss of wildlife habitat. The Government have at last announced a review of planning policy that designates garden land as brownfield landa long overdue review.
	The petition of my constituents states:
	To the House of Commons
	The Petition of residents living in Belmont, Cheam, Sutton, Stoneleigh and Worcester Park in the London Borough of Sutton, and others,
	Declares that the quality of life of residents is harmed by the designation of garden land as brownfield land, because it allows inappropriate development to take place. Suburban back gardens have ecological, environmental and social value that should be protected from unwanted development.
	The Petitioners therefore request that the House of Commons calls upon Her Majesty's Government to change planning policy guidance and planning law to allow local councils to develop and implement planning policies that protect private gardens from development which is out of character with the surrounding area.
	And the Petitioners remain, etc.
	[P000313]

Northern Rock

Bill Etherington: This petition is one of many involving Northern Rock shareholders. The issue is almost becoming an omnibus; there have been several such petitions, and I have no doubt that there will be more.
	I have not always seen eye to eye with all the Northern Rock shareholders, and I want to make my position plain. They have been very critical of the Government, but I do not accept that they should be. The Government did not ask for the Northern Rock situation, but they had to deal with it.
	However, one has to feel sympathy for people who believe that they are going to lose most or all of their savings, and I most certainly do. The directors of Northern Rock, not its shareholders, led to the current situation. The shareholders are worried about how the valuation was done when the company was no longer liquid. They believe that that will lead them to suffer an injustice and unfairness. I have faith in the Government, who have tried to do the right thing by everyone involved in Northern Rock. Nevertheless, I have described the feelings of the petitioners. All they are asking for is fairness and justice, and no one in this place would want to object to that. I hope that the Secretary of State and the Government will take notice of what seems to me to be a heartfelt plea. I thank you, Mr. Speaker, for your consideration in arranging this spot for me under somewhat unusual circumstances.
	The petition states:
	The Petition of small shareholders and supporters of Northern Rock of the Sunderland North constituency in the North East of England,
	Declares that it welcomes the acknowledgement by the Government that it must pay compensation for nationalising Northern Rock plc, but that the terms of reference for the valuation of the shares are wrongly based as the company was not in administration and was still a 'going concern'.
	Further declares that if these terms are unchanged there will not be a fair compensation payment which will lead to many in our region having their savings and pensions undermined which in turn will have a negative impact on the North East's economy.
	The Petitioners therefore request that the House of Commons calls on the Government to reconsider the terms of reference given to the valuer so that he can fully reflect the true value of Northern Rock shares.
	And the Petitioners remain, etc.
	[P000314]

UNITED STATES MISSILE DEFENCE SHIELD

Motion made, and Question proposed, That this House do now adjourn. (Ms Butler.)

Peter Kilfoyle: I have been struck by a couple of political clichs in the past few days. One was the attempts by the Foreign Secretary and the American Secretary of State to outdo each other in singing the praises of the special relationship, whatever that may mean to each of us. The other was the comments that I read today, made by the right hon. Member for Haltemprice and Howden (David Davis), who referred to the claim that American intelligence would be withdrawn in certain circumstances in relation to Guantanamo Bay. I mention that because in military terms, American intelligence is sometimes an oxymoron, to put it mildly. Nevertheless, one needs to understand what both clichs imply when considering our role in missile defence.
	We are at a point in time when we have a new American President, whom I shall pray in aid in the course of my speech. I urge hon. Members, and certainly the Minister, not to get too excited by President Obama. I would, if I may, refer him to page 309 of The Audacity of Hope to show how difficult it can be to appraise American intentions. President Obama is talking about the need to establish a consensus before the kind of precipitate action for which the Bush Administration became a byword is taken. He says:
	Nor do I mean that we round up the United Kingdom and Togo and then do as we please.
	I find that a rather disparaging comment. I think that it shows disdain, if not contempt, for the United Kingdomor perhaps he is just being absolutely honest. Nevertheless, it is the framework within which I believe that the new Administration will work.
	I have spoken many times about missile defence; let me remind the House of what it is. It is a successor to President Reagan's strategic defence initiativestar wars, as it was called. It was initially called, very tellingly, national missile defence, until even the Bush Administration realised that that implied that it was an American system for American defenceas in fact it wasand changed it to missile defence, often known by the acronym BMD: ballistic missile defence. The only way in which this could be introduced was by the Bush Administration being able to withdraw from the 1972 anti-ballistic missile treaty, which they did.
	The system is a highly sophisticated technological concept by which a missile, or projectile, is fired at a missile at one of several stages in order to take it out in the course of its flight. It has been likened to a bullet hitting a bullet at about 1,600 kph. Over the years I have conversed with people such as Ted Postol, who was the father of the Trident missile system, and Dick Garwin, who started his professional life as a weapons expert on the H-bomb. One would associate both those men, by their own admission, with the right of the political spectrum. They are hardly loony lefties, but they are united, along with many other members of the Federation of American Scientists, in one beliefthat this is a wholly impractical system. To my knowledge, it still has not been shown to be a proven way of intercepting offensive missiles.
	The question has often been positedand nobody has ever been able to reply to itWhat happens if a so-called rogue state holds one of these weapons and sends it into space, and the United States, or whoever, has some means, as the technology currently stands, whereby it could guarantee that it could knock it out, and that state, which is presumably sophisticated enough to do so, incorporates some kind of decoy into its missile? That is, as yet, a completely untested proposition. The tests to date have included decoys of a different sorthoming devices that have enabled rockets to be semi-accurate. I can just see a rogue state putting a homing device into a rocket for us to knock out.
	President Obama has, in all fairness, expressed doubts about this. He has said that he wants to
	ensure that it is developed in a way that is pragmatic and cost-effective; and, most importantly, does not divert resources from other national security priorities until we are positive the technology will protect the American public.
	Will it work? Is it affordable? Those are very big questions that need to be answered, certainly in terms of our involvement, for reasons that I will come to in a moment. The truth is that we have fallen blindly in line behind this system with, in their different ways, right-wing Governments in the Czech Republic and Poland because of what is almost a paranoia fostered by what Eisenhower referred to as the military-industrial complex. Huge amounts of moneyhundreds of billions of dollarsare invested in the development of this system, and that money comes from names that are familiar to those who have studied the trade in death otherwise known as the arms trade. They will not let go of their vested interest lightly .
	There is no question but that there are dangers abroad in the world, but Members will recall the coining of the phrase the axis of evil. The No. 1 member of the axis of evil that had to be removed at one stage was Saddam Hussein in Iraq. That removal was predicated upon mythical weapons of mass destruction: many of us did not believe in them then, and we were shown to be right. The focus then moved to North Korea, which was launching missiles all over the place. We were told that North Korea was building up enough fissile material to create a certain number of bombs, and that the matter had to be resolved. There were threats of military action, but it all came down to negotiation. To bring things up to date, we now have someone else to demonise. We demonise Iran because it has a nuclear power programme. Doctor el-Baradei, who nobody believed when he said there were no WMDs in Iraq, has done a commendable job on behalf of the International Atomic Energy Authority in monitoring what is happening in Iran. With its launch of a satellite using its own missile, those who want to have someone to fear find it even easier to demonise it.
	As I said, President Obama seems at best equivocal about missile defence. People of some import within Europe, such as President Sarkozy, have dismissed the missile defence project as destabilising. It seems to be Governments of a certain persuasion in parts of the former Soviet Union's area of influence who have given any sort of support to missile defence.

Jeremy Corbyn: Does my hon. Friend not share my astonishment that former Prime Minister Tony Blair said to President Bush that he could have missile defence in this country? Unlike what happens in Poland and the Czech Republic, there has so far been no substantive debate or vote whatsoever in Parliament on this matter. Does he agree that, at the very least, the matter deserves parliamentary scrutiny because of the implications for an arms build-up, or pressure in Russia for a rearmament programme?

Peter Kilfoyle: My hon. Friend has pre-empted the kernel of what I am driving towards. If he will be a little patient, I shall come to that issue in some detail. But he is right to indicate that there has been great disquiet in the United Kingdom, and not always from the sources that we might expect. Some of us in this party are painted as taking a particular view on the different manifestations of militarism, but the Select Committee on Defence issued a report in January 2003 commenting on the modernisation of Fylingdales, which I visited at that time to see the new radar that was being installed. The project was going aheadthat was a statement of fact.
	The Select Committee noted:
	We deplore the manner in which the public debate on the issue of the upgrade...has been handled by the Ministry of Defence. It has shown no respect for either the views of those affected locally by the decision or for the arguments of those opposed to the upgrade in principle...We believe that it is incumbent on the MOD to publish as much of the detail of the request as it is able to. For example, more information could be published on the timescale for...its incorporation into the US missile defence system and how the system would be able to track missiles.
	The Committee had real and practical concerns.
	Other comments of concern were also made. In November 2007, more than 110 MPs signed early-day motion 65. It was entitled Parliament and decisions over US missile defence, and it called upon the Government to arrange a full debate, as my hon. Friend the Member for Islington, North (Jeremy Corbyn) said a moment ago,
	to allow hon. Members to scrutinise in public the US Missile Defence deployment plans in the UK.
	In November 2008 more than 50 MPs, including former Ministers, issued a public statement calling for a public debate on US plans to push ahead with the missile defence system using bases in the UK and Europe.
	An open debate would have been the key to finding out what was going on. The right hon. and learned Member for North-East Fife (Sir Menzies Campbell) asked the then Prime Minister, Tony Blair, in a parliamentary question:
	When does he intend to tell the House of Commons the nature of his discussions with President Bush about the possible deployment of part of an anti-ballistic missile system for the United States in the United Kingdom?
	A pretty straightforward question, I would have thought. Unfortunately, once again, what we all believed at the time to be a commitment by the then Prime Minister was just smoke and mirrors. He replied:
	We will tell the House as soon as there is something to say. At the moment, those discussions are at a very preliminary stage, but it is important that we have them with the United States to see what options are available for this country and whether ballistic missile defence would be good for us or not. It is entirely sensible that we have those discussionsobviously they are on a confidential basis, but as soon as we have something to report we will do so.
	Having been probed further by the right hon. and learned Gentleman, he went to say:
	I am sure that we will have the discussion in the House and, indeed, outside the House when we reach the point at a which a proposition can be put before people. Of course, the technology is untried
	so we agree on one thing
	and is under development in the United States which, as was indicated a short time ago, is in discussion with Poland and the Czech Republic...It is entirely sensible for us to work out the possible options and what the country's possible interests are. When we have a proposition to put, we will come back and put it. No doubt, the right hon. and learned Gentleman can then tell us whether or not he is in favour of it.[ Official Report, 28 February 2007; Vol. 457, c. 919-920.]
	I am sorry to say that that opportunity was not given to the right hon. and learned Gentleman. In a written statement issued to Parliament on 25 July 2007, one day before the House rose for the summer recess, the then Secretary of State for Defence, the right hon. Member for Kilmarnock and Loudoun (Des Browne), wrote:
	On 5 February 2003 the Secretary of State for Defence announced the Government's agreement to a request from the US to upgrade the Ballistic Missile Early Warning System radar at RAF Fylingdales...That upgrade process is now complete and we expect that the radar will switch its operations to the new equipment from August 2007... Also, at RAF Menwith Hill
	a misnomer, because I think there are only about two or three RAF people at RAF Menwith Hill, and it is wholly American-run, controlled and organised
	equipment will be installed and operated by the US Government to allow receipt of satellite warnings of potentially hostile missile launches, and will pass this warning data to both UK and US authorities.[ Official Report, 25 July 2007; Vol. 463, c. 71WS.]
	There we have ita Prime Minister promising one thing and a Secretary of State for Defence doing something entirely different without any reference to the House, showing almost total contempt. So much so that the Select Committee on Foreign Affairs later stated in its second report on global security and non-proliferation:
	We regret the manner and timing of the Government's announcement that RAF Menwith Hill is to participate in the US ballistic missile defence system
	note the name change
	and the resulting lack of Parliamentary debate on the issue. In its response to this Report, we recommend that the Government inform us of the date on which it received the formal proposal from the US to include Menwith Hill in the BMD system. We recommend that there should be a full Parliamentary debate on these proposals.
	Almost as an aside, the report continued:
	We conclude that Russian opposition to US ballistic missile defence (BMD) plans in Central Europe largely reflects Moscow's sensitivity about the presence of NATO infrastructure in its former satellite states. As such Russian opposition will be hard to overcome.
	I fear that the Committee understated the case at that stage.
	There was still no explanation of why the promised and heralded debate never eventuated. I hate to pray in aid members of the Liberal Democrat party, but the hon. Member for Eastleigh (Chris Huhne) tabled a written question to that end. He asked:
	for what reason no debate, consultation or oral statement took place in the House before the decision...to allow the installation and operation by the US Administration of equipment to allow receipt of satellite warnings of potentially hostile missile launches at Menwith Hill; and whether any intelligence received via the installation will be made available to the United Kingdom at the same time as to the United States.
	The responsible Minister gave the same sort of evasive, bland non-answer that we received previously. The then Secretary of State said:
	Defence Ministers routinely answer written and oral questions on missile defence issues and there are regular defence debates scheduled throughout the year to allow MPs to raise specific issues on the Floor of the House. My written ministerial statement... was intended to keep the House informed of developments in areas of UK support to the US missile defence programme.
	That is an insult to the House's intelligence. To table that as a substantive reply to a simple question, raising a matter that the former Prime Minister had promised would be discussed on the Floor of the House, is an absolute insult.
	Another Liberal Democrat Member, the hon. Member for Lewes (Norman Baker) asked the Secretary of State for Defence:
	when a Memorandum of Understanding was signed between the UK and US governments on the formal use of RAF Menwith Hill in the American Missile Defense System; and if he will place a copy in the Library.
	That is an important question, and the answer was:
	There is no memorandum of understanding covering these specific arrangements.[ Official Report, 16 October 2007; Vol. 464, c. 937W.]
	If there is no memorandum of understanding and no consent from the House, who has the wherewithal and the power to take on themselves the task of effectively negotiating a foreign treaty with a foreign military power over a sovereignat least in theoryBritish base? I would like to know the answer to that. I hope that the Under-Secretary can provide an answer to that and other questions at some stage, if not today.
	I ask the Under-Secretary: on what legal basis does the UK support US missile defence? Do the Government agree with President Obama that missile defence should
	not divert resources from other national security priorities until we are positive the technology will protect the American public
	and, presumably, the British public?
	Have the Government joined NATO in welcoming the announcement by Russia that it was
	shelving plans to deploy nuclear-capable missiles in Kaliningrad?
	I believe that the Russians are making a gesture to the new US Administration, and I await with eager anticipation Her Majesty's Government's response to it.
	Do the Government recognise that the new US Administration offer the UK and the world an opportunity to ease global tension by resiling from many of the aggressive foreign and military policies, including missile defence, of the Bush years, to which we gave knee-jerk obeisance, as an unequal partner in the so-called special relationship?
	The Under-Secretary may be glad to know that this is my penultimate question. Do the Government agree with the July 2007 YouGov survey, which showed that 68 per cent. of the British people agreed that UK support for missile defence should be decided by Parliament, while 54 per cent. agreed that siting US missile defence early warning bases in the UK, Poland and the Czech Republic would increase security threats faced by the UK and Europe?
	Finally, will the Government allow Parliament to debate and decide whether the UK should continue to participate in the US missile defence programme, as promised by the former Prime Minister, as recommended by the Select Committee on Foreign Affairs and as agreed to by 68 per cent. of the British people in the aforementioned YouGov poll, regardless of whether President Obama decides to proceed with it? I hope that at some stage either the Minister or his colleagues in the Ministry of Defence can give me substantive answers to those questions, rather than dismissive ones.
	 Motion lapsed (Standing Order No. 9(3)).
	 Motion made, and Question proposed, That this House do now adjourn.( Chris Mole.)

Quentin Davies: I congratulate my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) on obtaining this Adjournment debate on a matter of considerable interest to many people, as he rightly said. He speaks not only from deep conviction on the subject, but from a long-standing involvement in it. Indeed, I have noticed his early-day motions and the other initiatives that he has taken to draw public attention to the issue.
	It often happens on these occasions that the Minister replies to the Member who has secured the debate by reading a written statement. That can sometimes lead to the two individuals speaking past each other, so it might be more helpful in the time that I have to try to focus on the questions that my hon. Friend asked. Before I do so, however, let me say two things briefly. First, there is an illusion, which I wish to lay to rest, that the Government have a plan to deploy interceptorsan anti-ballistic missile systemin this country. We have no such current plans. That is an error in the early-day motion to which I have referred and I hope that I can lay it to rest.
	Secondly, let me explain what national missile defenceor international or anti-ballistic missile defenceis about. If my hon. Friend went to Fylingdales, he would see a radar picture on a screen of the upper atmosphere and the surrounding areas of space over quite a large section of the northern hemisphere. He would be able to see all the various objects in that space, including satellites and the launches of commercial satellites, all of which we will have been notified of, which can be tracked through that system. Occasionally he might also see a meteor or something exciting of that kind.
	However, if one fine daywell, it would not be a fine day; it would be a day of horroran unidentified flying object appeared on that screen and the computers calculated from its trajectory that it was heading for us, there would be nothing practical that we could do about it, and that has been true for decades. It would be possible to notify the Vanguard submarine currently on patrol and to notify the Prime Minister, but nothing could be done. We would simply have to sit and wait to see whether that day was the day of Armageddon. Anti-ballistic missile defence provides an alternative to that. It provides the possibility of doing something about that object, which might be a rogue missile from a rogue state or an errorone does not know. That is the difference between having an anti-ballistic missile system and having no such system.
	Let me go through the points that my hon. Friend raised. First, he talked about the effectiveness of the system and said that it was not proven. The system is not proven in the sense that there is a great deal of technical work to be done on it. He mentioned electronic counter-measures and decoys. Without going into sensitive areas, let me assure him that all those issues are being addressed. [Official Report, 9 February 2009, Vol. 487, c. 10-12MC.] All I can say is that up to nowthis information has been in the public domainthere have been quite a number of firings by the Americans of their anti-ballistic missile systems. There have been 47 successes so far, as against 37 failures. The system is certainly making progress, so any assumption that it is technically non-viable would be a rather rash one to make.
	My hon. Friend asked whether the information from the radars at Fylingdales to which I have referred and the information from the satellite sensors being downloaded at Menwith Hill is available to our authorities and the Americans at the same time. The answer to that is simply yes.
	My hon. Friend raised the attitude of Russia. Russia's attitude is difficult to understand. As he knows, the intention of the United Statesthis is the matter currently under discussion with Polandis to site 10 interceptors in Poland. Under the strategic arms reduction treaty, Russia has the right to 1,600 delivery systemsthat basically means missilesand, if I remember rightly, up to 6,000 warheads. It is inconceivable that 10 interceptors could make the slightest difference to a country with 1,600 missiles or thereabouts and a great many more warheads to deploy. That is not an argument that can be taken seriously.
	I agree with the suggestion that my hon. Friend rightly made that there could be a great deal of sensitivity in Russia about a country that was a satellite of the Soviet Union and, for a century and a quarter before 1917, part of the tsarist empire and that is now, thank heaven, part of the European Union and NATO, getting involved in a close, collaborative, strategic defence relationship with the United States. I agree that that might well touch sensitive nerves. Whatever Russia's attitude is, however, it is not based on a rational calculation of the potential impact of those interceptors in Poland on anything whatever to do with its own missile or second-strike capability. I think that we can lay that one to rest as well.
	My hon. Friend asked about the legal basis for Menwith Hill. I can tell him that a legal agreement under which American personnel have worked in Menwith Hill was signed, I believe, in 1955. I might not have got the date absolutely right, but it was certainly in the '50s. That agreement was introduced under the status of forces agreement that we signed with the Americans a few years earlier, at the beginning of the constitution of NATO. That agreement is still in place; it has never been rescinded. We do not need to sign an agreement with the United States every time we have a defence co-operation arrangement or every time we exchange information, which we do the whole time, I am glad to say. Our symbiotic relationship with the United States is the basis of a large amount of British national security. We share a lot of information and we have a very productive and important relationship, which is a great national asset.
	My hon. Friend also asked me whether I believed that we should divert resources from our core defence budget to missile defence. We are not doing that, and the incremental costs involved in putting the new equipment into Menwith Hill and Fylingdales were met entirely by the United States, so that issue has not arisen. As I have already told him, there are at the present time no plans to site an anti-ballistic missile system in this country, so that question does not arise.
	My hon. Friend asked me whether we joined the rest of NATO the other day in welcoming the Russian Government's statement that they no longer intended to deploy missiles in Kaliningrad. Of course we welcome that; I can give him that assurance. He also asked whether the Government agreed with a particular survey. My answer is the one that I think he will have anticipated. The Government do not make it their business to agree or disagree with a survey, which is simply a series of questions. Of course, the Government listen to these surveys and take account of them, however, and I take on board what he has told me about that particular one.
	Finally, my hon. Friend asked me about Parliament. Naturally, Parliament has had several opportunities before this evening to debate the ballistic missile defence issue. The last occasion was, I believe, 8 May last year, when we had a debate on defence in the world. The Government have made a commitment that, if we should take a decision to locate an anti-ballistic missile system with interceptors in this country, there would certainly be an opportunity for Parliament to debate the matter before we did so. However, I can assure my hon. Friend that no such decision has been taken and none is in prospect at the present time.
	I think that our time is up, but may I once again congratulate my hon. Friend on his success in pursuing this cause with his characteristic tenacity? My colleagues and I remain entirely at his disposal, either for future occasions on which we can debate this matter in Parliament, or if he wants to come to see us privately to talk further about it.
	 Question put and agreed to.
	 House adjourned.